HELP! Stuck at 692 how can I reach 700's?

[jeannieavc]

I'm at 692 (EQ) right now.  2 cc's zero balances, 1 installment loan at 30% (last payment due in Oct./10), 1 CO from 5 years ago unpaid, 2 Inquiries.

I will be purchasing a car in December and wanted to be in the 720's for best rates. Any ideas on how to gain some points?

[RobertEG]

The unpaid charge-off is apparently your major factor.  That is a major derog in and of itself, along with any monthly derogs that the OC reported before doing a charge-off.

Have you offered PFDs to this OC for payment in exchange for deletion of either/or the prior monthly derogs, or the CO itself?

Also, as an unpaid CO, they could report it out to collection, after which a debt collector could report an additional CA to your CR.  That would further harm your score, rather than obtain improvement.

I would focus on this CO.

[Anonymous]

You may want to post this in the Rebuilding forum for the most help.

Here goes on a couple suggestions:

1) Make sure that you use one of those cards each month and that the reported balance (usually the statement balance or the balance on the last day of the month) is between 1% and 9% of your credit limit for that card.

2) The charge off is hurting your credit score a lot. You want to find out what the SOL is for the type of account that is charged off (I assume it's a credit card) in your state. If you can't afford to pay the charge off, then I suggest doing nothing and just let it fall off your credit report. If you can pay the charge off, then there are two scenarios:

A) If the SOL has expired, then I would send them a letter offering to PFD (Pay For Deletion) of the trade line or derogatory information. Since they cannot sue you for the full balance -- if the SOL has expired -- you likely have a lot more leverage in securing a deal. Make sure that if they accept your offer that you receive a letter confirming the terms on their letterhead. Search PFD letter for more information.

B) If the SOL has not expired, any action you make may wake the sleeping giant and may complicate things. For example, they can sue you. If you want to try a PFD, you must have the full balance available to pay in case you get sued or it can further complicate your credit.

Keep in mind that although the charge off is hurting your credit score, there is no guarantee that deleting the trade line will improve your score if the deleted account is your oldest account and the deletion would cause your AAofA and/or length of credit history to decrease.

Good luck.

[RobertEG]

Excellent, and very relevant comments, Stan!

It just reiterates that this CO should probably be your primary focus.

To determine such things as expiration of SOL is, I agree, important before just going on a PFD rampage.

I never advise one to always PFD, for the reasons Stan has so well stated.

Can you post the dates of delinquencies on the OC account as just a starting point?  And if you know it, the date of SOL for revolving credit debt in your state?

The only addtional comment I would offer on Stan's comments is that, if the account is old, you probably dont want any PFD offer to request account deletion, just individual deletion of derogs that occured for that account.  But it could, as has been stated, lead the OC to just delete the account.

[jeannieavc]

Thanks for the feedback Stan and Robert. I really appreciate it. 

Ok, the dates are as follows:

Aug/05-30 day late

Sept/05-60 day late

Oct/05-90 day late

Nov/05- 90+ day late

Dec/05- 90+ days late

Jan/06- CO

Also, I don't know if it would impact my AAoA because I opened this account in Aug/02 but I also opened my car loan in Aug/02.  They are both my oldest accounts on EX and EQ.

The SOL for FLorida for revolving credit is 4 years from the date of last payment which on my reports is saying June 2005. Even if it was sold to a collection agency the 4 years begins on the date of last payment. So I beleive that I am in the clear, right? And I believe that you said before that I probably would not see any points as its turning five years old but if it is effecting your score less and less as time passes shouldn't it release a couple of points here and there? Oh and the balance is $773.  I would love to PFD it.  WHat do you think?

[RobertEG]

You are probably correct.  My cursory understand of the FL SOL statue is that it runs 4-years from  date of last voluntary payment on the revolving debt.

If your date of last payment was in 6/2005, then the FL state SOL has probably tolled, providing you an abosolute legal defense, should they bring legal action.

So that kinda helps you, as Stan's post points out, in not having to be concerned with the legal implications of either doing nothing, or venturing into PFD offers to attempt removal of the CO before 7 1/2 years (with an appartent DOFD of 8/2005, its normal fall-off date would be 2/2013). with the threat of legal action.

Their knowing that your SOL has expired may improve your chances of their agreement to deletion of the prior derogs in any PFD offer you now make..  However, you dont know what they will do.  If they can find a debt collector to assume the out-of-SOL debt, you could still get a CA posted to your CR. Not highly probable, but some low-end debt collectors may buy it, and then attempt to harass you for payment.  It is just an unknown.

So that raises another good point.  What if the OC sells or refers the debt to a debt collectior, and that debt collector then posts a CA to your CR?  The CA then is limited to the same 7 1/2 years from the same DOFD of 8/2005 as was the CO.  So if a CA reports, then you would have to deal with them until after 2/2013.  EVen of you get the OC or the CA to thereafter accept a PFD agreement, any agreement by the OC wont requrie CA deletion, and any PFD agreement you obtain with the debt collector wont requrie OC reporting deletions.  It would highly complicate attempts to get earlier deletions.

In any PFD to the OC, remember that:

The 30-day late is separte, and remains until after  8/2012

The 60-day late is also separtate, and remains until after 9/2012. ....and so on, monthly.

Just be aware, if you send a PFD to the OC, to clearly specifify which derogs you are requestiing deletion of, and if account deletion is not your goal, to not ask for that.