Resume student loan payments or pay charge-off first? Down to 3 negs on CR.

[SedimentaryRock]

Hi. Thanks to those who have commented on m posts for your advice so far. My scores have increased about 30 points each, and this without reflecting that I paid off a $2500 installment loan a week ago. Total paid off is about $7000 in 6 weeks.

• I'm trying to decide how to approach these THREE remaining negatives on my CR (below.)
• My goal is to buy a home with an FHA loan around October 2021.
• I have $2000 per month to put toward resolving these negatives.
• I don't know if I can call BBVA and Net Credit and work out payment arrangements, or if I need to have all the money now. Scared to call—I keep hearing “don’t talk to them.”

My question is what order to put these in based on how quickly it will impact my credit score.

My options seem to be:

• Resume student loan payments ASAP, over the next year just save the money monthly and pay BBVA first and then Net Credit, then down payment.
• Pay BBVA first, resume paying student loans in September and then pay Net Credit and save down payment over the next 12 months.

Remaining negatives on credit report:

Defaulted Student Loan

• Wait 1-3 months and use that $850/month to work on the other two items?

BBVA 

• $5600 charge-off as of Sept 2019
• Planning to just pay it, assuming I'll have to pay in full but not sure

Net Credit Financial Services

• $6900 charge-off from Sept 2019
• Planning to just pay it, assuming I'll have to pay in full but not sure

When do I apply for the mortgage, by the way? How far ahead of when I want to close?

THANK YOU!!!!

[SedimentaryRock]

OR--do I put some money toward a Navy Federal secured credit card or something? I feel like I am seeing people with more negatives who have a higher scores. Would another credit card help?

Fico 8 579/635/597

AAoA 48-53 months

Accounts:

Discover 0/$200 (one 30-day late 11/18)

Indigo 0/$300

First Premier $48/$500

**AMEX 0/$600 (in transition from unpaid CO to Optima)

**Avant 0/$4200 (instllment loan, just paid off)

Bridgecrest Auto ^16k left, never late, plan to refinance soon

The accounts I listed before:

Department of Education (Defaulted)

BBVA

Net Credit

**items still in transition, assume a score increse of some sort when they are settled

[Anonymous]

You said defaulted student loan. Is the SL currently in default or has it been brought current?

[SedimentaryRock]

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@Anonymous wrote:

You said defaulted student loan. Is the SL currently in default or has it been brought current?

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Still in default. I'm just waiting to see which item to address first to get it out of default. I know I have to have it in good standing to get an FHA loan. Thanks.

[Anonymous]

I would get things handled with the SL's first. You don't wanna PO Uncle Sam and the faster you can get those rehab'd and showing a positive payment history the better. I'm not familiar with the SL rehab process, so someone else will have to weign in on that.

From there I would pull my CR and see who actually owns the CO debt. If the OC owns it still, then a settlement and/or PFD is unlikely and you will have to PIF. Try to get them Paid asap so you have some time for them to age and to GW them to death for removal.

If the CO debt has been sold, then your odds for a settlement just went up. If it has been sold then you need to know if it is reporting to the CRA's yet (Check your CR and look for a collection TL). If one or both are not reporting yet, then contact them asap to figure something out. Sometimes you can keep them from reporting if you can get the account paid before they ever report. If they are reporting then attempt PFD, and attempt to settle the debt.

The goal here will be for you to get all of this handled asap so they can start to age. Getting the SL's caught up and a positive payment history going will help to show that you have corrected your mistakes and are now a responsible borrower. 

[dragontears]

Do you qualify to rehab your student loans? 

[SedimentaryRock]

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@dragontears wrote:

Do you qualify to rehab your student loans? 

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No, already did that and then lost my job, so rehab is no longer an option. I'll work out an income-based repayment plan. I've looked into it and know what my payments are estimated to be, just need to call them and make it official.

[Anonymous]

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@SedimentaryRock wrote:

OR--do I put some money toward a Navy Federal secured credit card or something? I feel like I am seeing people with more negatives who have a higher scores. Would another credit card help?

Fico 8 579/635/597

AAoA 48-53 months

Accounts:

Discover 0/$200 (one 30-day late 11/18)

Indigo 0/$300

First Premier $48/$500

**AMEX 0/$600 (in transition from unpaid CO to Optima)

**Avant 0/$4200 (instllment loan, just paid off)

Bridgecrest Auto ^16k left, never late, plan to refinance soon

The accounts I listed before:

Department of Education (Defaulted)

BBVA

Net Credit

**items still in transition, assume a score increse of some sort when they are settled

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I wouldn't worry too much about another card just yet. You have two decent bank cards and a couple of others one, so you will be able to AZEO when everything gets paid and caught up. If you absolutely want another card then, get it asap after you fix the SL's so that it can start to age before it's time to mortgage app.

Keep your head up on the scores. There are people with better scores in worse situations, but you will get there. Time is probably the biggest factor between you and them. Just try to get it all resolved asap, so time can work it's FICO magic.

[SedimentaryRock]

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@Anonymous wrote:

I would get things handled with the SL's first...

Thanks for this. 

The two outstanding debts are reproting on my CRs as still with the original creditor. I've been told that neither does a PFD. So if I PIF, so be it. Just wasn't sure which to do first and if it was ok to just call them and try to work out a settlement. If I could, I could do all of these things at once. And I could do it Friday.

I have heard you can get in trouble talking to them but I think I'm pretty much going to have to pay anyway, and they're already reporting, so I don't know what anyone can do to make it worse, lol.

Ideally, as you say, I get SL reporting as being paid quickly and then everyone goes on auto while payments just get made for a year and I apply for my mortgage.

[Anonymous]

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@SedimentaryRock wrote:

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@dragontears wrote:

Do you qualify to rehab your student loans? 

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No, already did that and then lost my job, so rehab is no longer an option. I'll work out an income-based repayment plan. I've looked into it and know what my payments are estimated to be, just need to call them and make it official.

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Did you complete the rehab and then re-default or just did not complete the rehab?

If you did not complete the rehab, you can always restart the rehab process.