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What Else Should I Be Doing?

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What Else Should I Be Doing?

Hi everyone.

 

I've been trugging along in the credit rebuilding journey for a bit now and wondering if I should be doing something more. After a hell of a year back in 2016, I've been slowly trying to fix the mess I created for myself by having several defaulted and closed credit cards and a car repossession (voluntary, but that doesn't matter when it comes to my credit file).

 

As it stands now, I have been making payments to collections agencies, several of whom have agreed to delete the file once paid (agreed in writing). Some outright refused. I wish I had the kind of income that would allow me to just pay everything off at all once, but my life just isn't set up like that, so I've been paying them down slowly, and giving priority to the ones who will delete. The total for all collections is about $17,600, including the repo. There are 13 negative accounts, which will go down to 11 on the 15th when a final payment is made to two of them. It's a lot. I know this will take time to resolve, which is frustrating but it is what it is.

 

Along with this, I have 3 open loans that are paid as agreed (two "credit builder" loans, both opened 6 months ago or less, and a whopping student loan), along with two credit cards, also paid as agreed. One of them I literally never use (store card) and the other one is OpenSky and I try to keep that balance down. The limit is only $250 and I'm not sure if I should bump that up. I pay the card down to around $5 - $10 monthly before the statement date.

 

I do use CreditCheckTotal. My last FICO scores were: 551 Experian, 553 Equifax, and 567 Transunion. My Experian is now up to 570 but I can't see the other 2 for another 30 days. It's moving upward, but still major room for improvement. I do use the Experian Boost and opted in for rental and other bills to be reported. All are, of course, paid on time.

 

My question is, should I be doing anything else right now? Anything I'm missing? Or should I just continue as I have been and be patient?

 

Thanks!

Starting Scores - Jan 2019:
EQ: 550 TU: 558 EXP: 539

Current Scores - August 2019:
EQ: 573 TU: 590 EXP: 587

1st Goal: Over 640 across the board

Cards:
OpenSky $250 ($0 balance), Capital One Platinum $300 ($0 balance - new approval), Ann Taylor $250 ($0 balance)
Message 1 of 10
9 REPLIES 9
Senior Contributor

Re: What Else Should I Be Doing?


@mrsjisokay wrote:

Hi everyone.

 

I've been trugging along in the credit rebuilding journey for a bit now and wondering if I should be doing something more. After a hell of a year back in 2016, I've been slowly trying to fix the mess I created for myself by having several defaulted and closed credit cards and a car repossession (voluntary, but that doesn't matter when it comes to my credit file).

 

As it stands now, I have been making payments to collections agencies, several of whom have agreed to delete the file once paid (agreed in writing). Some outright refused. I wish I had the kind of income that would allow me to just pay everything off at all once, but my life just isn't set up like that, so I've been paying them down slowly, and giving priority to the ones who will delete. The total for all collections is about $17,600, including the repo. There are 13 negative accounts, which will go down to 11 on the 15th when a final payment is made to two of them. It's a lot. I know this will take time to resolve, which is frustrating but it is what it is.

 

Along with this, I have 3 open loans that are paid as agreed (two "credit builder" loans, both opened 6 months ago or less, and a whopping student loan), along with two credit cards, also paid as agreed. One of them I literally never use (store card) and the other one is OpenSky and I try to keep that balance down. The limit is only $250 and I'm not sure if I should bump that up. I pay the card down to around $5 - $10 monthly before the statement date.

 

I do use CreditCheckTotal. My last FICO scores were: 551 Experian, 553 Equifax, and 567 Transunion. My Experian is now up to 570 but I can't see the other 2 for another 30 days. It's moving upward, but still major room for improvement. I do use the Experian Boost and opted in for rental and other bills to be reported. All are, of course, paid on time.

 

My question is, should I be doing anything else right now? Anything I'm missing? Or should I just continue as I have been and be patient?

 

Thanks!


Adding to your Opensky could help with your utilization management, but it sounds like it's a better use of your money to pay off the collections.

Once your credit-builder loans are complete, don't take any more out, your student loan has the 'installment mix' of the "types of credit" slot filled, so they don't really add much to your credit profile (or score).

It's just the slow slog from here.  Good luck getting things paid down.


EQ: 795 | EX: 785 | TU: 783 | Accounts: 2/6 6/12 10/24
Happy practitioner of AZE6or7or8
Message 2 of 10
Frequent Contributor

Re: What Else Should I Be Doing?

It seem like you're doing everything right, so far.

 

I wouldn't waste your time paying on the collections who aren't offering a PFD right now. Instead, focus on the ones who are willing to PFD.

 

You didn't mention if you have offered (or been offered) settlements for these accounts. There's no reason you should be paying 100% of the balance. If the collections are a couple years old, chances are you can settle them for around 50% of the balance.

 

$9k is a much easier pill to swallow than $18k. And you can still set up a "pay over time" agreement even when you settle for less, though most collection agencies will offer slightly lower settlement offers if you can pay the whole settlement amount at once.

 

Once you've negotiated a low settlement for a CA that is offering a PFD, and set up a payment plan with them that you can afford, pay those off first. Ignore the ones who refuse PFD, for now. Once the ones who offered PFD are finally paid off, then you can restart your negotiations with the remaining ones for PFD. Eventually they'll usually cave, but you have to be the one with leverage. If you're paying them anyways even without a PFD offer, then you have no leverage. They need to know that the only way they're getting paid is if they offer a PFD.

 

It is also worth looking into the Debt Snowball technique, which basically means paying off the smallest accounts first. Save the biggest creditor for last. You may have to adjust the technique slightly to account for creditors who aren't offering good settlements or PFDs yet - save those ones for last even if they're smaller than others.

    Total CL: $21,100
Fico 8 Scores:
12/2018:
03/2019:
06/2019:
09/2019:
Goals:   550 by 12/2018 600 by 3/2019   650 by 6/2019   700 by 1/2020   750 by 1/2021 800+ by 1/2022
7 derog. (all settled 1/2019)     |     Inquiries: 1, 4, 5     |     AoOA: 10.2yr     |     AAoA: 5.4yr     |     AoYA: 0.6yr
Message 3 of 10
Senior Contributor

Re: What Else Should I Be Doing?

Oh, since you are willing to use EX Boost, Transunion also has an option for adding rental history to help boost your score as well:

https://ficoforums.myfico.com/t5/Credit-in-the-News/Rent-payments-can-add-40-points-to-FICO-scores


EQ: 795 | EX: 785 | TU: 783 | Accounts: 2/6 6/12 10/24
Happy practitioner of AZE6or7or8
Message 4 of 10
Frequent Contributor

Re: What Else Should I Be Doing?

I also want to add one more note - don't focus on "rebuilding" yet. You've already got a few open accounts with good payment history, so just focus on keeping them in good standing, and getting rid of the old bad accounts. You shouldn't apply for ANY new credit until every single collection is dealt with (whether that be paid and deleted, or just paid but not deleted). Eventually, if your only remaining collections are still not offering PFD, you might have to just bite the bullet and pay them anyways so they quit reporting every month.

 

The moment your last collection is dealt with, you'll see your scores skyrocket, probably into the 625-650 range. At that point, you can start rebuilding and looking at some new accounts. But before that point, it would be a bad use of your time and money to seek new accounts.

    Total CL: $21,100
Fico 8 Scores:
12/2018:
03/2019:
06/2019:
09/2019:
Goals:   550 by 12/2018 600 by 3/2019   650 by 6/2019   700 by 1/2020   750 by 1/2021 800+ by 1/2022
7 derog. (all settled 1/2019)     |     Inquiries: 1, 4, 5     |     AoOA: 10.2yr     |     AAoA: 5.4yr     |     AoYA: 0.6yr
Message 5 of 10
New Member

Re: What Else Should I Be Doing?

Thank you! This is all super helpful info!

 

Aside from my largest collection (the repo, which is $12k of the nearly $18k in collections balances), I can reasonably pay every single one of them off by Nov/Dec even if I paid the full amounts, if I really buckle down over the next 6 months. I will definitely try some negotiating to see if I can get those amounts down, however, and keep working toward the PFDs, as well.

 

The $12k one is where I get stuck. I could set up payments with them, I'm sure, but it will be a long while before I can get that paid off fully. That's the one that had me considering just filing bankruptcy for a while, but decided that wasn't the right path for me.


So, here's my follow-up question: Would it be better for me to knock out all of them except that big baddie first over the next 6 months, and then tackle that one? Or would it be better to throw money equally at all of them each month, lowering all the balances more slowly, which would mean all of them end up getting paid off later? Does it matter?

 

Thanks again!

Starting Scores - Jan 2019:
EQ: 550 TU: 558 EXP: 539

Current Scores - August 2019:
EQ: 573 TU: 590 EXP: 587

1st Goal: Over 640 across the board

Cards:
OpenSky $250 ($0 balance), Capital One Platinum $300 ($0 balance - new approval), Ann Taylor $250 ($0 balance)
Message 6 of 10
Established Contributor

Re: What Else Should I Be Doing?

I have a repo on mine and I haven’t even attempted to pay it. I have been paying off all the other ones and to me I don’t feel it would make a difference because they report to the credit bureaus even if you don’t pay. I say pay what you can in full and handle the other later unless You feel they may sue you for it.





Starting Score: 494 503 521
Current Score: 503 507 507 2/19
Goal Score: 680


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Message 7 of 10
Frequent Contributor

Re: What Else Should I Be Doing?

Knock out all the little ones first, do the big one last. Your credit report/score does not care if you're making payments towards your collections balances, it only cares how many collection have a balance. A collection balance of $1 is treated the same as a collection balance of $12k.

 

So the best way to help your scores right now is to reduce the number of collections that have a balance. If you can get that number from, say, 6 or 8 or however many you have, down to just 1, then it will help a lot. And then, you can focus all your energy (and money) on just dealing with that one last collection, instead of trying to divide it all up among all of them.

 

Edit: and I agree with what the person above me said, if you are getting sued, or threatened to be sued, by any of them then you should deal with those first. Is one of them a Discover card by any chance? If so, make them your first priority, because Discover is very, very lawsuit-happy.

    Total CL: $21,100
Fico 8 Scores:
12/2018:
03/2019:
06/2019:
09/2019:
Goals:   550 by 12/2018 600 by 3/2019   650 by 6/2019   700 by 1/2020   750 by 1/2021 800+ by 1/2022
7 derog. (all settled 1/2019)     |     Inquiries: 1, 4, 5     |     AoOA: 10.2yr     |     AAoA: 5.4yr     |     AoYA: 0.6yr
Message 8 of 10
Established Contributor

Re: What Else Should I Be Doing?

Discover would nice to me because I defaulted in 2017 and didn’t pay them off until this month but yeah I had 24 accounts to pay and now down to 7 with the repo still reporting and my score has gone up as I go along I can probably get to the 600s before this year is over.





Starting Score: 494 503 521
Current Score: 503 507 507 2/19
Goal Score: 680


Take the myFICO Fitness Challenge




Message 9 of 10
New Member

Re: What Else Should I Be Doing?

Yes, one was a Discover collections from a secured Discover card I had. I'm 90% sure I accepted and paid a settlement on that one in full, though. I'll need to go back and check my pile of papers to be sure.

 

Paying off all the smaller ones over the next 6 months (hopefully with settlements, which would make it so much less of a hardship to do) sounds like a solid plan, though. Then I'll tackle the repo somehow. To my knowledge, they don't plan to sue, tho I guess any of them could do so pretty much at any time. Anyone have any experience with Financial Assistance, Inc? That's the CA that currently has it.

Starting Scores - Jan 2019:
EQ: 550 TU: 558 EXP: 539

Current Scores - August 2019:
EQ: 573 TU: 590 EXP: 587

1st Goal: Over 640 across the board

Cards:
OpenSky $250 ($0 balance), Capital One Platinum $300 ($0 balance - new approval), Ann Taylor $250 ($0 balance)
Message 10 of 10
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