So my Fiancé and I would like to buy a home one day. After looking at his credit report I realized we are a long way and it seems hopeless and its embarrassing. So we paid a couple collections and we got him two secured credit cards and both currently have no balance. He also has a car loan. Most of these happened when he was laid off from the same job twice. He is now much more financially secure and we would like to be able to take care of this. I’m also confused about charge offs vs collections. Any idea of where to begin? Any help would be greatly appreciated. I know this can’t be fixed in a day. I just need direction. We have cut out most unnecessary spending to allow more money to pay our debt plus i work as well. I apologize if this is hard to read.
Going forward I would certainly try to get rid of as many collections as you can. A PFD(Pay For Delete) would be ideal. I'm sure others will chime in with advice.
What I can recommend for the future is that you do not leave those 2 cards with 0 balances. You'll take a scoring penalty(usually 15-20 points) for not actively using your credit. It is as simple as leaving a Netflix subscription on auto pay. When your statement comes out from your credit card, just pay it. Your card will always report this small balance to the credit bureaus and thus avoid the scoring penalty.
You don't have to implement the above scoring strategy now. I wanted to mention it for future reference and especially when you want your scores optimized for your future home purchase.
Well you don't have a lot of big balances that's a good thing. LVNV Funding will remove the account from your report after it's paid but the OC will stay on there.
Call Midland ASAP:
Midland Funding $559 DOF: 02/15 (This account should be been deleted if you already paid it)
I would not recommend using services - you can take care of your credit (vs spending money for someone to do what you can easily do yourself).
There's a lot of good information in these forums and plenty of people are really, reallly helpful, especially with regards to dealing with some of these companies.
Go through, pay your collections/ charge offs - try to get PFD (pay for deletes) when possible and then start goodwill letters (search for "saturation technique") for those that are paid, but did not PFD. It'll be a long road, but you can get there.
As Queen_Etherea mentioned - make sure you use one of those two secured cards - let it report a small balane every month before you pay in full. Using your credit will help your credit score.