Rebuilding my Credit From Rock Bottom

Anonymous · ‎10-01-2021

Hello All, this is my first official post about my current credit repair journey though I'm right at 10 months into it, and I cannot stress it enough, I would not have gotten this far without MYFICO FORUM. I used it to develop a strategy by which to handle every negative account on my reports. Let me just say to everyone starting out in credit repair. There is NO "quick fix", and there is NO "cutting corners". You have to establish a PERFECT payment history moving forward and MAINTAIN it always. You have to address (pay/settle) every legitimate derogatory on your reports. We often avoid them like the plague but you'd be surprised with how accommodating creditors and even collection agencies can be if you just talk to them. When I started my credit repair journey in December 2020, I had a Bankruptcy on my record, 40 derogatory accounts, and 19, yes 19, collections. My credit was about as bad as it can get (around 450 across all three bureaus). Now, 10 months later, the bankruptcy is gone (aged off in April 2021), I'm down to 17 derogatory accounts (all paid charge offs), and I just paid the last couple collections who have agreed to PFD, so hopefully in the next month or so I'll have no collections on my report. As of today, my Fico 8s are Exp - 660, Eq - 653 and TU - 653, and vantage scores are about the same. I'm hoping to get a boost large enough from the last of my collections dropping off to push me into the "Good" credit category, so wish me luck! So how did I do it? First of all, I did it on my own in that I did not consult or hire a credit repair company. I did, however, start driving for DoorDash and Grubhub to boost my income enough to tackle all my bad debts and collections. Yes it was hard, a lot of late nights, bad tips, and took ten long months, but I am so glad I did it. As far as the derogatory accounts still on my report (again, all paid charge offs) I've embarked on a comprehensive goodwill letter writing campaign. I've had limited success but I'm staying persistent. I've also begun sending debt validation letters to the credit bureaus (targeting the most recent derogatory accounts first and working my way backward). As far as establishing good credit, I've done very well in this regard, 18 months of perfect payment history and a healthy credit mix with 2% revolving utilization (practicing AZEO). Again, all you guys at Myfico forum were so helpful in my rebuild journey. I cannot thank you all enough. With that in mind, based on what I've shared thus far, does anyone have any advice moving forward? I'm hoping to buy a house next year and I feel so close to that becoming possible. Any insights or guidance you would like to share would be greatly appreciated! Thanks in advance!

SoonerSoldier33 · ‎10-01-2021

Congrats on an amazing rebuild story! Excellent motivation for others!

My only insight/advice is to be careful messing around with paid COs. Once the balance is reported $0, and monthly reporting of the CO status ceases, they begin to age, and affect your scores less the older they get. If you 'wake' them up with a validation, it hits as a 'fresh' charge off status, and the aging process starts all over. I know this is true for disputes. If 'requesting validation' from the CRAs is a fancy way of saying dispute, you're playing with fire on aged COs.

Standard mortgage prep advice. Mortgage lenders use FICO scores 2,4,5 for lending decisions. These scores are very sensitive to new accounts and accounts with balances. Best not to apply for anything new 12 months prior to applying for a mortgage. At mortgage time, implement AZEO to maximize your revolving utilization for max scores.

I think you've done great. Congrats and good luck!

Team Garden Club as of Oct 2021

satio · ‎10-01-2021

Congratulations on your journey and recovery till date.

Isn't adulting fun?

As stated, for COs paid to zero, I would hesitate sending anything to the CRAs regarding these accounts. You want to let them age and any validation will trigger a status update that pounds your score as compared to allowing small gains each month as they age.

I will state that you may very well see a nice bump when the last collection is removed. Its difficult to predict but in my personal case as well as others I have helped in their owner credit repair journey having No Collection accounts did create a nice boost in each and every case. You don't see the jump till the last one is gone.

Keep up the good work!

Anonymous · ‎10-01-2021

Thank you for the advice. I did just want to clarify. I've sent out debt validation letters to the bureaus requesting they provide me with any data or paperwork they have on the given account. I am not disputing the debt and I make that fact clear in the letter.
Also, I'm fortunate to be a disabled veteran, and therefore am qualified for a VA loan.

SoonerSoldier33 · ‎10-01-2021

@Anonymous wrote:
Thank you for the advice. I did just want to clarify. I've sent out debt validation letters to the bureaus requesting they provide me with any data or paperwork they have on the given account. I am not disputing the debt and I make that fact clear in the letter.
Also, I'm fortunate to be a disabled veteran, and therefore am qualified for a VA loan.

OK, just be careful. You don't want to lose any progress you've made on aged COs.

I'm a veteran too (still serving actually), and VA Home Loans still have under writing requirements. I don't know what your mortgage scores look like as you complete your rebuild, but they, along with DTI and other factors, still matter for approval. Best of luck.

Team Garden Club as of Oct 2021

FireMedic1 · ‎10-02-2021

Nice job getting these in the past. Let sleeping dogs lie. You want to verify something. Just pull your free annual credit reports which can be done once a week. No more disputes. Even if you say its not in your letters they will take it as that. Remember your dealing with CRA's who dont care that much. Sorry you went backwards after BK. Big lesson learned now. Dont let history repeat itself. Congrats!

SoonerSoldier33 · ‎10-02-2021

@FireMedic1 wrote:
Nice job getting these in the past. Let sleeping dogs lie. You want to verify something. Just pull your free annual credit reports which can be done once a week. No more disputes. Even if you say its not in your letters they will take it as that. Remember your dealing with CRA's who dont care that much. Sorry you went backwards after BK. Big lesson learned now. Dont let history repeat itself. Congrats!

I wasn't sure about this, but that's what I thought too. You request validation of an old CO that has aged from the CRAs, they send out the validation request to the OC. When the OC responds, the CRAs will update the tradeline as validated triggering a 'fresh' CO hit, and the aging starts all over. It's basically a dispute, and you're bringing that CO back to a recent status. Not a good move. I guess, if you're a gambler, you roll the dice that the OC doesn't validate, and it gets removed? Total crapshoot, and I'm not doing it with any of my aged COs for sure. I like watching them age. Lol. Am I missing something?

Team Garden Club as of Oct 2021

Anonymous · ‎10-02-2021

I will have to say that my extensive research in this regard has rendered contrary results. When validating or even disputing accounts on the credit bureaus, the only thing that changes is the comments. It does not change the date that the charge off occurred or the DOFD. The impact on scores for a validated account is negligible particularly when under manual review with the mortgage underwriters. Not only do mortgage underwriters examine each account and are well aware of the actual charge off date, but calling the bureaus to have comments removed from verified accounts is common. If my credit score is so precarious that validating items on my credit report might mean the difference between approval or denial then I have no business applying anyway. As a consumer, it is my duty to require the credit bureaus to ensure all data on my consumer reports are accurate and that they can prove that fact. I will not let fear of possible "temporary/artificial" dings to my score deter me from doing my due diligence. I think the credit bureaus have already got so many consumers living in fear of challenging them. I refuse to be one of them. But again, I appreciate the advice guys!

FireMedic1 · ‎10-02-2021

@SoonerSoldier33 wrote:
@FireMedic1 wrote:
Nice job getting these in the past. Let sleeping dogs lie. You want to verify something. Just pull your free annual credit reports which can be done once a week. No more disputes. Even if you say its not in your letters they will take it as that. Remember your dealing with CRA's who dont care that much. Sorry you went backwards after BK. Big lesson learned now. Dont let history repeat itself. Congrats!
I wasn't sure about this, but that's what I thought too. You request validation of an old CO that has aged from the CRAs, they send out the validation request to the OC. When the OC responds, the CRAs will update the tradeline as validated triggering a 'fresh' CO hit, and the aging starts all over. It's basically a dispute, and you're bringing that CO back to a recent status. Not a good move. I guess, if you're a gambler, you roll the dice that the OC doesn't validate, and it gets removed? Total crapshoot, and I'm not doing it with any of my aged COs for sure. I like watching them age. Lol. Am I missing something?

It isnt that a new timer will start again with a new DoFD. It comes back updated and that looks as if neg is brand new. Nothing changes the DoFD when the timer actually began.

SoonerSoldier33 · ‎10-03-2021

It isnt that a new timer will start again with a new DoFD. It comes back updated and that looks as if neg is brand new. Nothing changes the DoFD when the timer actually began.

I should have worded that better. I wasn't talking about resetting the DoFD. I was talking about bringing the CO status back 'fresh', and having the aging from the last time the CO was reported starting all over again.

Team Garden Club as of Oct 2021