What should I do next....? Frustrated and Tired

Anonymous · ‎03-28-2018

We want to buy a home in about 7-8 months time. Here is where we stand now (positive and negative). I have removed LOTS of negatives already, this is what is left. What should be my next step? I'm getting kind of frustrated, because things aren't moving like I hoped they would. My husband's credit score is still hovering around 525-540, no matter what I do.

Please help! And thank you!

Negatives:

Capital One (D)	$630	C/O
Capital One (S)	$1619	C/O
Discover (D)	$1849	C/O
Discover (S)	$1681	C/O
Kohls (S)	$602	C/O
Plaza Services (S)	$1288	Collection
Capital Bank (S)	$152	C/O
ERC/ AT&T (S)	$469	Collection
Austin Capital Bank (D)	$0	Late (60)
Austin Capital Bank (S)	$0	Late (60)
Chase (DS)	$6791	C/O
Amazon	$0	C/O
Old Navy	$0	C/O
United Revenue/ Texas Physicians	$423	Collection
Credit Systems/ Mansfield Water	$83	Collection
Credit Systems/ Green Mountain	$400	Collection

Positives:

Capital One Secured (D)	Limit $200
Loft (D)	Limit unknown
Victoria’s Secret (D)	Limit $250
Victoria’s Secret (S)	Limit $300
Express (S)	Limit $500
Boscov’s (S)	Limit $250
The Children’s Place (S)	Limit $250
Ulta (S)	Limit $400
New York & Co	Limit $750
Wayfair	Limit $500

tedb · ‎03-28-2018

Hey…don’t get frustrated…it’s a process. I have to ask, on your positives are those carrying a balance? If they are not, I would try to knock out the low hanging fruit of the $83 Mansfield Water and $152 Capital Bank. As you knock those off start putting that money into Green Mountain and Texas Physicians. I would go from lowest to highest if you can. As you pay off the lower ones, roll that money into the others. The “snowball method” as Dave Ramsey says.

As you pay off the collections start writing Goodwill letters to see if you can get them removed as you pay them off. It’s going to take some time, as I’m currently in the Goodwill letter writing campaign of my own rebuild, but it’s doable. Just keep your head up and keep grinding at it.

Anonymous · ‎03-28-2018

I am rotating which card I use each month, keeping the balances below 20%ish.... I pay each off after it reports one month.

I'm also disputing a couple of the collections right now, because they were previously removed when I disputed them and they returned just a couple days ago..... I'll probably just pay the smaller ones, but I want to see what the CRAs can do first.

Thanks!

RobertEG · ‎03-28-2018

For each derogatory account, the date of first delinquency, the number and severity of each subsequent monthly delinquency, and the current status (e.g., paid or delinquent) is needed in order to advise as to how to address....

Anonymous · ‎03-28-2018

@Anonymouswrote:
I am rotating which card I use each month, keeping the balances below 20%ish.... I pay each off after it reports one month.
I'm also disputing a couple of the collections right now, because they were previously removed when I disputed them and they returned just a couple days ago..... I'll probably just pay the smaller ones, but I want to see what the CRAs can do first.

Thanks!

A word of caution: I did that and have been told that wasn't a good idea. It's better to have the credit and use it, but not actually carry a balance over on any statement (i.e. don't let any balances report). Apparently it's okay to do this via the AZEO method, but I didn't understand that when they said All Zero Except One they literally meant ONE card. I was rotating balances, and what ended up happening is, due to varied statement dates and thus reporting times to bureaus, I'd have as many as 3 cards show up with a balance at times and destroy my utilization.

thornback · ‎03-28-2018

Those charge off accounts still showing a balance are factoring into your overall credit utilization and, considering the fairly low credit limits of your active accounts, it's hurting you. Unless they are due to fall off very, very soon, you (and your scores) would benefit from paying them and bringing the balances to zero to free up util. Doing so would also prevent further negative reporting updates from the creditor - and, depending on the age and SOL in your state, would prevent further collection activity.

From what I understand, mortgage lenders would require you pay the debts anyway to be approved.

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Anonymous · ‎03-28-2018

Try and workout something with the chargeoffs. No mortgage company will approve you with any chargeoffs. Nor will any lenders unless youre trying for a secured card. Try and settle the accounts to be PIF less than original total etc and when you get the chance you can pay them off in full. If you have the income right now i would recommend that you pay all of those C/O's off asap especially if youre looking to buy in the next 7-8 months. Your best course of action may be to take whatever 20% of your down payment and pay all of your C/O's off and stay where youre living for an extra year to recoup that money. Your total utilization is being hurt by any collection / charge off reporting a balance ( pertaining to credit cards ). Unfortunately youve got some work ahead of you but if you pay attention to the big wigs here youll be debt free sooner than you know it. I was in a similiar situation to you and now im in the 700's waiting for one charge off to completely fall off of my account in a few months. Good will letters, PIF letters, and overall not giving up is the key. I wish you the best of luck!

Anonymous · ‎03-29-2018

There's a mindset problem here more than a money problem. Fixing this likely won't fix the mindset because if you're "frustrated and tired" over it, you're going to easily be "giddy and happy" when you fix it and in the future run up high debts at Victoria's Secret and other places that have no purpose in minimum needs for survival.

I'd suggest you first start liquidating assets -- especially anything you bought and defaulted on. Live frugally for a long time so you can reset your mindset in "spending = joy" and "not spending = frustration".

Paying off chargeoffs reduces the risk of them going to collections or becoming lawsuits. That's always the #2 priority. #1 is setting a frugal budget and learning to be happy being frugal. For many years. Otherwise, you'll be like many who come here and go from 500 scores to 700 scores and then be back here in 2 years again.

Anonymous · ‎03-29-2018

I'm not saying you're wrong, so please don't take it as such.

I've already done SO MUCH work. This is why I'm tired.... I put in months (a year?) of work and see no real change yet.

We lived credit free for 4 years, and I didn't realize that this was really hurting us. Now, I'm just trying to get a credit score high enough to buy a house. We've lived frugally as you suggested for the past year, even to the point of being homeless....

At this point, rebuilding our credit and buying a house is the only thing keeping me from giving up in life.

Anonymous · ‎03-29-2018

Staying in this apartment another year is not an option. We already moved and lived with family to save for a year, and it didn't do a thing for our credit.

Are you suggesting I try to settle the C/Os to be reported as paid? I can't afford to pay them all in full, and frankly, I don't want to. Also, you're saying to focus on the ones reporting a balance, correct?

Congratulations on your success - it's people like you who give me hope!