Rebuild help for my husband and son

[Anonymous]

Hi and thank you in advance for any help or tips you can provide!

Long story short, my husband is trying to repair and build his credit to be able to purchase a vehicle and increase credit limits on his cards.

My son wants to repair and start preparing to purchase a condo and car.

Husbands Credit summary:

Credit Wise score: 621 (Transunion is who Creditwise uses I think)

Using 81% of Credit

Total Debt: 26,612

Personal Loans: $12,581, Credit Cards: $6929, Other: $7102

Available credit: $1671

4 Negative accounts: 1 unsecured loan at a credit union $1657, 3 other accounts total $7102 (possibly furniture that was purchased)

** Should he decrease his loan balances and pay off the negatives? Or Negotiable a payoff for the negatives? I guess I need any tips on how to increase his credit worthiness. 

My son:

Trans Union score - 547, Experian - 523, Equifax - 513

Has a vehicle that insurance would not pay off after accident. Debt is $12k owed. Last payment made was in 2017. Reported as a Loss Charged off account

Deliquent student loans

Multiple Collection/Charged off accounts

Apartment collection for $1577

What should he do about the Collection/Charged off accounts? And the vehicle? Should he just file a bankruptcy?

[Sandman771]

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@Anonymous wrote:

Hi and thank you in advance for any help or tips you can provide!

Long story short, my husband is trying to repair and build his credit to be able to purchase a vehicle and increase credit limits on his cards.

My son wants to repair and start preparing to purchase a condo and car.

Husbands Credit summary:

Credit Wise score: 621 (Transunion is who Creditwise uses I think)

Using 81% of Credit Definitely need to get the UTI down to a manageable percdentage. Say below 10%

Total Debt: 26,612

Personal Loans: $12,581, Credit Cards: $6929, Other: $7102

Available credit: $1671

4 Negative accounts: 1 unsecured loan at a credit union $1657, 3 other accounts total $7102 (possibly furniture that was purchased)

** Should he decrease his loan balances and pay off the negatives? Or Negotiable a payoff for the negatives? I guess I need any tips on how to increase his credit worthiness. I don't understand what is negative about them? late payments? An unsecured loan is a good thing as it shows responsibility. 

My son:

Trans Union score - 547, Experian - 523, Equifax - 513

Has a vehicle that insurance would not pay off after accident. Debt is $12k owed. Last payment made was in 2017. Reported as a Loss Charged off account

Deliquent student loans  these can be rehabilited if they were federal ones. I am doing just that right now. 

Multiple Collection/Charged off accounts

Apartment collection for $1577

What should he do about the Collection/Charged off accounts? And the vehicle? Should he just file a bankruptcy? BK sounds like a legitimate option with all that going on. It would wipe everything clean and give him a fresh start. Many on here have come up to 700's post-BK

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[calyx]

When you say "delinquent", do you mean there are lates, or that it's in full default?  If default, have him call his servicer and get into rehab.  After 9 monthly payments (based on income, though right now it's $0 due to coronavirus relief), the default will be gone (lates may stay) and he'll have fresh, positive tradelines.

If he's having trouble with repayment in a standard plan once they're out of default, there a number of income dependent plans he can apply for that would lower his monthly payment due.

Edited to add:   (Federal) student loans are very rarely discharged in BK, so if he went with the BK option, he'd still owe them.  He needs to call his servicer regardless of what he does with the rest of his debt.

[Anonymous]

Good advice above. I would also advise you to obtain FICO scores from all three bureaus. CreditWise is a legit score but it's based on an alternate algorithm called VantageScore 3.0, and VS3 is used by almost zero lenders. Relying on it will give you no real insight on creditworthiness.