Starting my journey...I have some questions

[Anonymous]

I've gotten myself into a hole the past year with credit, and I've dropped from having a score in the lower 700's two years ago to 570 today. It's something I've been sticking my head in the sand about, but I've finally gathered the courage this fight this head on and deal with the consquences of the decisions I made. 

Here are the bad marks on my credit report:

• One 30 day late payment on a now paid off and closed CC in 2010
• Two 30 day late payments on a credit card I currently have open
• A variety of late payments on my student loans, ranging from 30 over 90 days (I know this is slaughtering my score)
• I have one account in collections for around $200 but I have no idea what it is. I just saw it on my report I pulled earlier but I have no clue who the collector is, what the bill is for and how to contact them.

Here are the steps I've taken so far:

1. I made the open credit card with 2 late payments current as of this month. 
2. I worked with the company managing my student loan to get my account current as of this month. The late payments did not go long enough for them to send them to collections nor put the loan into default

My plan from here on out

1. Ensure I make on time payments here on out for all accounts
2. Work to pay off my credit cards. I have two accounts totaling around 15k, one around 13k and another around 2k. I will put as much as I can into the 2k card and close the account once paid off, while making minimum payments on the bigger account. I will then pay off the card with the bigger limit. I hear that keeping a credit card open but keeping your use a small percentage of your limit is good for your score.
3. Continue to make the regular payments on my student loan. Once I'm out from under the credit card debt I hope to speed up the process of getting my student loans taken care of as well. 

Quesetion about collections: 

1. What do I do with the collection? I have no clue what it is or who it is for. Any advice on who to call to get info on what this collection is for and if it's even legitimate? If it is real and my debt, what is the best thing to do in regards to rebuilding my credit?

Question about student loan late payments

My student loan late payments are a complete mess on my report. My loan was recently sold to another company (as apparently is happening to a lot of student loans now), I have about 8 different late payment hits from the Dept of Education who was handling my student loans before it was sold. Apparently they listed them as individual disbursements (for each semester I guess) eventhough I just make one lump payment. Also, they just show as closed. Eventhough I now have my student loan current, I'm afraid that looks like I never paid it off. So my questions regarding this are

• Is there anyway for the late payments not to show up as so many individual accounts?
• Does the account status as closed mean that it will seem like I never paid them off eventhough I'm now current with my loan payments and I never went into default or collections?

Overall credit score question:

I'm sure everybody asks this, but am I honestly looking at 5-7 years of being in the 500's or will the steps I'm taking help me get back up to more manageable levels sooner? What is a realistic expectation for score improvement based on the situation I laid out above and my plan to tackle my credit issues? 

Thank you so much everybody!

[Anonymous]

After doing research for a number of hours on here yesterday, I think I've come up with a more concrete plan on how to get my credit under control. I'm hoping to keep this thread as a log of my progress so i can keep myself accountable, and hopefully if I'm sucessful, provide motivation for others who feel they will never get out from under this (like I feel right now). 

First and foremost, I'm blessed to be in a career field with a wide variety of flexbility in terms of working extra hours/second jobs, so I'm looking to immediately pick up a 2nd job, or at least work overtime at my current job. I've already got applications out. If it comes down to it, I can always look to pick up shifts at my current job as well. All money from overtime/2nd job is going straight to fixing my credit and getting myself finances in order.

Changes already made:

-Current on all accounts now, including my student loans which had overdue payments for a variety of months this year. That was the big first step for me.

Plan:

Credit cards:

retail card, 2k limit, 2k balance - pay this sucker off as soon as possible. If I get the job I'm hoping for and the hours I'd like, i can easily have this done in a couple months. I'll keep the card open but with a zero balance

Primary bank, 12k limit, 11.5k balance - pay minimums until I have the retail card paid off, and then throw everything I can at this one. I'll keep it open with a low balance/no lates after it's paid off to hopefully help my credit score continue to grow

Collections:

One account for $210 - First I'll be sending a DV to the CA, followed by a dispute or PFD depending on if the debt is legitimate or not. I already have the letter printed out and I'll be sending it Certified Mail later today.

Late Payments:

Retail card 30 day late in 2010 - Not sure if I should take action or not. I hear it has not effect on your score after 2 years. If some of the experienced folks on here tell me otherwise, I'll move foward with GW

Retail card 30 day late in July 2013 with best buy/capital one - I already have GW written out and will be sending out tomorrow. I'm worried this will be hard to clear since Best Buy transferred their accounts to Citibank a couple months ago.

Student Loans multiple 90+ day late on 8 accounts (multiple disbursements apparently) with Direct Loans - This is the one I'm almost certain I have no chance of clearing since Direct Loans Servicing no longer handles student loans. I'm going to call Great Lakes, who handles my loan now, to see if there is anything I can do with them regarding those lates. If not, I'm not sure what else to do since Direct Loans apparently closed their service center and there is no way to even get them to respond to GW requests now.

Student Loan one 90 day late Great Lakes - I had one more 90+ day hit after my transfer. It will still be hard to clear but at least I know I can work with Greak Lakes. I'll likely be sending a GW to them as well after I speak with them today regarding the Direct Loan accounts.

It's going to be long and tough, but let's get this journey started!

[titanofold]

Welcome to the forums!

The worst part of the journey is the waiting with bated breath for a response.

Press forward with the GW for the 2010 30-day late. It still effects your score, though not as much as one within the past 24 months.

[newmomnewme]

I love your plan!!!!! I was about to reply to your initial post and say "Don't close your accounts!!!" That is what I did 5-6 years ago...I paid off credit cards and closed the accounts...I didn't realize I could just sock drawer them and keep positive credit in my drawer.   Keep us posted!!! 

I am GW too!!

[Anonymous]

I made a couple calls and I have a feeling I may not be able to get rid of the lates on my student loans prior to my loan being transferred from Direct Loans Servicing Center in September this year. Their contact number has been disconnected and my new lender refuses to deal with information prior to picking up the loan. It really sucks because the latest hit was August 2013, so I have almost the full seven years left I just don't see how I can get a GW for these lates now.

I know I can still do a lot of repair, but that's going to be a huge hurdle to overcome in the coming years unless there is some miracle solution to deal with this.

[Anonymous]

Well my first set of GW's are the mail along with a DV heading to the collection agency for one collection I have on my report. I know it's just a small first step in a very long process but it feels good to get started. Now I wait and in the meantime research better contacts/success stories for the companies I'm trying to get a GW from.

[newmomnewme]

I didn't believe it, but letting all of your cc report $0 and have one (your largest CL) report less than 9% will give you a real score boost. I went from 40% to 20% util and I saw a 20-25 pt score increase across all 3 CRAs.

[Anonymous]

It doesn't really matter which card you let report the balance as long as it is just one.  CL are not factored into your score.

[newmomnewme]

but guiness56, wouldn't be easier to stay under 9% on the card with the highest CL? 

[Anonymous]

Yes, it would.