What now? Just a waiting game?

[Jutz]

Earlier this year I decided enough was enough and I was going to make it a priority to work diligently on my credit.  I pulled up my credit report, set some goals, and went about paying off debt.  I found good websites including this one that made me fully aware of how credit works.  Problem was of course, the damage had already been done over the last few years.  I don't have a ton of debt, but I have a terrible payment history and three collections accounts.  Here are my biggest problems:

30 days past due on 5-6 occassions over the past 2 years.

30 days past due twice in the past year.

3 Collections accounts (Utility, $1000, paid; Medical, $180, paid; Medical, $360, unpaid)

More info:

Revolving debt total: $417 (Credit limit total: $2750)

Installment total: $27k (Majority are student loans, 4k is unsecured loan w/ co-signer, 3 years old.  Both accounts are in perfect standing)

Additional Problems:  I acknowledged the debt of all three collections accounts, I'm assuming I really shot myself in the foot from a leverage perspective.  I've yet to pay one, hoping I can use that for a pay and delete, but I acknowledged it regardless.

I have one credit card from BoA with a limit of $1400, but it's been closed for 2 years, I'm just now paying it off.  It still shows as part of my rotating credit limit.  I assume this will be completely closed on my report once I pay it off in ~60 days.

My question is, now that I've paid off or will pay off all of my debt in the next month+ is there anything else I can do but wait?  I've read plenty about GW letters, but from the feedback I've seen recently, no one is getting a positive response.  I am confused by the HIPPA process, and assume that since I've acknowledged my debt and paid in once instance, I can't do much there.  I'd really like to qualify for a decent car loan soon, and a mortgage in ~12 months.  For this obviously I'd need to be at a minimum 620, but 660+ would be great.

Thanks for any help or advice you may be able to provide.

[rckstrscott]

---

@Jutz wrote:

Earlier this year I decided enough was enough and I was going to make it a priority to work diligently on my credit.  I pulled up my credit report, set some goals, and went about paying off debt.  I found good websites including this one that made me fully aware of how credit works.  Problem was of course, the damage had already been done over the last few years.  I don't have a ton of debt, but I have a terrible payment history and three collections accounts.  Here are my biggest problems:

30 days past due on 5-6 occassions over the past 2 years.

30 days past due twice in the past year.

3 Collections accounts (Utility, $1000, paid; Medical, $180, paid; Medical, $360, unpaid)

More info:

Revolving debt total: $417 (Credit limit total: $2750)

Installment total: $27k (Majority are student loans, 4k is unsecured loan w/ co-signer, 3 years old.  Both accounts are in perfect standing)

Additional Problems:  I acknowledged the debt of all three collections accounts, I'm assuming I really shot myself in the foot from a leverage perspective.  I've yet to pay one, hoping I can use that for a pay and delete, but I acknowledged it regardless.

I have one credit card from BoA with a limit of $1400, but it's been closed for 2 years, I'm just now paying it off.  It still shows as part of my rotating credit limit.  I assume this will be completely closed on my report once I pay it off in ~60 days.

My question is, now that I've paid off or will pay off all of my debt in the next month+ is there anything else I can do but wait?  I've read plenty about GW letters, but from the feedback I've seen recently, no one is getting a positive response.  I am confused by the HIPPA process, and assume that since I've acknowledged my debt and paid in once instance, I can't do much there.  I'd really like to qualify for a decent car loan soon, and a mortgage in ~12 months.  For this obviously I'd need to be at a minimum 620, but 660+ would be great.

Thanks for any help or advice you may be able to provide.

---

You have made good choices in deciding to take action.

30 day lates tend to fade to about 5 percent damage after about 2 years, so the ones over two years should be minimally impacting. The 30 day lates in the last year, those are hurting the most. Have you contacted the OC and try a GW removal?

Your acknowledgment of the debt really doesn't change your negotiating stance too much. I wouldn't worry about what has been done, and focusing on what can be done. What companies are the collection accounts with?

The HIPAA process cannot be greatly discussed on this forum, as it violates certain TOS regulations, but it is intended for paid medical. You can google it and get more information.

The the unpaid collections. Have you contacted the OC? It is possible, if these debts are assigned, that you could work the CA out of the equasion and pay the OC, with the understanding they will 'recall' the debt from the CA. The CA is in no way obligated to remove the listing, but since THEIR client is the OC, they will usually abide by their wishes.

If they do not agree, you can start PFD negotiations. 

If that doesn't work, I would consider paying, and the GWing the collection accounts after payment. I had my most success doing that honestly.

Paying that BOA will help you score A LOT as it is still factoring utilization. Once thats at 0, it will help your scores quite a bit I think. Right now, if the BOA is showing high balance, your util is actally more like 1800 of 2400, not 400.

Hopefully others will chime in, but that's my two cents.

-scott

[Jutz]

Thanks for the response!

I've not tried contacting the OC on the unpaid account.  I will try that right away.  As far as the PFD, because the two medical accounts are with the same CA, do I have any chance at negotiating a PFD for both accounts by paying the one?  Or maybe PFD on one, then GW for the second?  I'd imagine being able to remove two of my three collection accounts would have tremendous positive impact on my score.

As far as the BoA closed account, it was closed but not charged off/sent for collections.  It's a credit card with 1400 limit, and reads as my current balance on my report ($317).  I'm worried that once it is paid off in full (~60 days) it will drop off completely from my rotating accounts and lower my total credit limit from 2750 to 1350, thus making my util ratio a bit more fragile, as well as lowering my average age of accounts.  (That account is about 6 years old, current avg age is 5). 

[rckstrscott]

---

@Jutz wrote:

Thanks for the response!

I've not tried contacting the OC on the unpaid account.  I will try that right away.  As far as the PFD, because the two medical accounts are with the same CA, do I have any chance at negotiating a PFD for both accounts by paying the one?  Or maybe PFD on one, then GW for the second?  I'd imagine being able to remove two of my three collection accounts would have tremendous positive impact on my score.

As far as the BoA closed account, it was closed but not charged off/sent for collections.  It's a credit card with 1400 limit, and reads as my current balance on my report ($317).  I'm worried that once it is paid off in full (~60 days) it will drop off completely from my rotating accounts and lower my total credit limit from 2750 to 1350, thus making my util ratio a bit more fragile, as well as lowering my average age of accounts.  (That account is about 6 years old, current avg age is 5). 

---

If the account was closed, the limit is not factoring into you util. 

So your util right now is about 700 of 1350. The balance IS factoring, but a closed limit will not in FICO scoring.

Removing 2 of 3 collections might not have the impact you think. It will have some, as it will push you towards one collection, but you dont really get specific bumps per collection account removed.. but YMMV.. Some people do report increases..

Good idea with the other collection with the same company, you maybe able to get them taken care of. But if they dont do PFD, HIPAA could very well work to remove those.

[Jutz]

Great info on the closed account counting for balance but not limit, that's what I was so confused on.  To be exact, I have 317 left on the closed card, 100 left on active BoA card w/ $600 balance.  I have a $750 capital one with $0 balance.  So right now I have 417/1350 util, as opposed to out of 2750, so a big difference in Util ratio.  Sounds like I need to keep my balance under $100 total until I have higher credit limits.  Does the actual amount of your total rotating credit limit matter, or is it just Age and Util?

Thanks again for your info.  Crazy helpful.

[Jutz]

Question for those in the know about AU accounts.  I have the opportunity to jump on at least one account as an AU.  My question is this: both would be just store cards, so the financing company wouldn't be a major credit card company. I've heard in the past that these capital companies don't look great on your credit report, but I'm wondering if the pluses would outweighs the minuses, or if that type of account even does look negative.  My second question would be, if I had to choose, what would be best: $1500 limit, $0 balance, open for ~10 years, or $6000 limit, $0 balance, ~5 years open.

The two companies by the way would be Credit first north America (Firestone) or GE Capital (GE Appliances)

[Jutz]

Anyone have any advice on the above AU question?  I'm ready to make the move if it's a smart one.

[Repo-ed]

Would really more depend on the util%

[Jutz]

Both are at 0% util.  Personally I'm at about 25% util, will be under 10 in the next 30-60 days

[rckstrscott]

---

@Jutz wrote:

Both are at 0% util.  Personally I'm at about 25% util, will be under 10 in the next 30-60 days

---

I would do it if the AAoA doesn't decrease too much..

You can always quickly remove AU account if they don't help the way you'd hope.. I used AUs to start when I rebuilded..

-scott