Abysmal Credit Score. Questions, concerns, and improvement. Could be long. Please bear with me

[catsoc]

Hello friends. I'm so glad to be here! Thanks for having me.

My Creditkarma score is 555. I know that's not FICO, but it's going to be terrible regardless. I'm 28. So my credit right now is a mess. I've dabbled in trying to fix it, but I really want to make some serious progress now. I'll try to be succinct yet thorough.

Credit utilization, payment history, age of credit history, and credit inquiries receive "A" marks on the report card thing. Total accounts (3 accounts) is D. Derogatory remarks (1 + 1 in collection) is B. Overall grade is F, obviously. The following 5 are my baddies.

 

3 Collection accounts. Two charged off accounts that at least are now paid or in the process of being paid:

(1) Sears-CO, paid in full to CA after they had it for a month. I didn't do the DV or anything. Staying until 11/2015

(2) Capital 1, CO, process of paying in full via payment plan. Sent them a DV letter, and they (a legal office CA representing Cap 1) got back to me with all the documents from what I could tell. 1 more year to go. Staying until 1/2016

(3) CA hired by my past leasing office (OC) for not paying a small cleaning bill. I found out recently after pulling my CR. Received no notification from either CA or Leasing office to the best of my knowledge. OC claims not to have received my forwarding address (that I also updated on USPS when I moved). Comes off CR mid-2018.

 

2 Closed accounts with late payments:

(4) BOFA credit card, several late payments over 3 years. Longest one is a 120 day late entry. Will become positive account in 1/2015. Stays until 2/2018.

(5) Chase credit card. A few late payments over 2 years. Longest is 60 days. Will become positive 8/2014. Stays until 12/2017.

 

*also 1 hard pull for credit card application last year

 

More about me: I have 3 active accounts in good standing (no late payments). 5 positive (no late) overall including car loan payoff. I used to have excellent credit prior to about 2008. I just got super lazy about paying bills and well.. now I'm in a shameful state.

 

Based on information I'd like the input for my plan and would like suggestions on possible letters to expediate some removals from CR.

 

My to do list so far:

1) Delete previous addresses with CRA.

2) Apply for a credit card(s) to increase accounts. I'm debating between applying for several secured cards that from what I understand should be easy to obtain with a deposit and/or applying for a unsecure rewards card such as Capital 1 Newcomers rewards card. I should have done this earlier. I didn't know about secured cards. My concern with secure cards is they suck, annual fee, and mostly useless once my FICO improves, and I'm eligible for better credit cards. Do I keep the secure cards after credit improves or close them? Most of the recommended secured credit cards have annual fees. I don't plan on keeping any sort of balance on any of the credit cards month to month. Also, I have around $1000-1500 to start off with for the secured cards. What is a recommended way of putting in the deposits for the secured cards that I apply for?

3) I'm not sure what to do about baddie (3). The apartment complex is part of a huge company that basically owns one of the major cities in Orange County, CA, and I'm not even sure they have the authority to accept payment. I'm looking into a PFD or Goodwill letter depending on who I would address the letter to. PFD for CA and Goodwill for OC? Is 1-2 punch worth considering? The CA doesn't seem to be reporting it from month to month. Just the date that the account has gone into collections.

4) I'm open to ideas on using letters for the other baddies.

 

Finally.. do letters still work effectively? A lot of the posts regarding DV and letter approaches were posted a number of years ago. Back then, things like PFD was a lot more successful. It seems to me that the CA's would be much more efficient and experienced dealing with the claims.

 

If you made it through this, THANK YOU! I am just one guy who couldn't sleep a wink last night thinking about all this, and I'm just looking to turn things around.

[stroked89coupe]

Welcome to the community.

[BDK]

Finally.. do letters still work effectively? A lot of the posts regarding DV and letter approaches were posted a number of years ago.

Hello. Yes, they are very effective and still very much relevant. Welcome!

[chugs102]

Sounds like you're serious about credit and are on the right track. No need to lose sleep now.

 

You already have a sound plan of attack

 

Write goodwill letters for

1) paid COs

2) closed baddies from BofA and Chase

 

PFD for open collections

 

If you have at least 3 open revolving credit accounts, then no need to get a secured card. Otherwise, look into joining some credit unions and open secured accounts. CU usually don't charge annual/service fees. Capital One also offers a secured card.

[catsoc]

Thanks guys and Chugs102,

 

I'm going to send goodwill letters for the baddies. One of the charge-offs, was not paid to the OC but to the CA. Is it correct to send goodwill letter to the OC still?

 

And for this headache of an open collection, I've confirmed that the OC does not seem to have control over the account anymore since they sent it to collections. The CA probably had the account for close to a year now, and I don't recall receiving any letter or phone call from them. They may have tried for all I know. Should I send a DV letter prior to the PFD? Am i still eligible to receive the benefits from DV? And if so, is this a case for a 1-2 punch letter? I'm almost certain the CA would have any document necessary to prove the debt..

 

Finally regarding the CU's as I don't have an individual credit card to my name any longer. There is a CU around me (in San Diego) that is highly regarded and a smaller CU that also serves those from my campus (UCSD). I'm a BOFA member, and would like to remain one as my principal bank. Is the main purpose of finding CU's to join in my situation for the no annual payment secured credit cards and hoping that it would lead to unsecured credit cards? Should my criteria for finding CU's to join making sure they offer free secured credit cards and no service fees? I'm trying to determine whether joining one of the bigger, well known CUs will be any more beneficial vs. me staying with the local CUs.

 

Thanks again

[coachtom2183]

Sounds like you're serious about credit and are on the right track. No need to lose sleep now.

 

You already have a sound plan of attack

 

Write goodwill letters for

1) paid COs

2) closed baddies from BofA and Chase

 

PFD for open collections

 

If you have at least 3 open revolving credit accounts, then no need to get a secured card. Otherwise, look into joining some credit unions and open secured accounts. CU usually don't charge annual/service fees. Capital One also offers a secured card.

[chugs102]

 

 

I'm going to send goodwill letters for the baddies. One of the charge-offs, was not paid to the OC but to the CA. Is it correct to send goodwill letter to the OC still?

 

 

Send it to whoever is reporting the COs. If that doesn't work, dispute on your CRA.

 

 

And for this headache of an open collection, I've confirmed that the OC does not seem to have control over the account anymore since they sent it to collections. The CA probably had the account for close to a year now, and I don't recall receiving any letter or phone call from them. They may have tried for all I know. Should I send a DV letter prior to the PFD? Am i still eligible to receive the benefits from DV? And if so, is this a case for a 1-2 punch letter? I'm almost certain the CA would have any document necessary to prove the debt..

 

 

1-2 punch them.

 

 

Finally regarding the CU's as I don't have an individual credit card to my name any longer. There is a CU around me (in San Diego) that is highly regarded and a smaller CU that also serves those from my campus (UCSD). I'm a BOFA member, and would like to remain one as my principal bank. Is the main purpose of finding CU's to join in my situation for the no annual payment secured credit cards and hoping that it would lead to unsecured credit cards? Should my criteria for finding CU's to join making sure they offer free secured credit cards and no service fees? I'm trying to determine whether joining one of the bigger, well known CUs will be any more beneficial vs. me staying with the local CUs.

 

 

You don't need to join a CU as long as you can get some secured CC without fees. I like CU because they also sometimes offer 0% promotions on balance transfers or low rates for auto loans, etc. Lots of advantages if you can join a big one like Penfed or NFCU. But when you're in credit repair mode, you can't be too picky. Some people get rejected by banks for secured cards so they have no choice but to join CUs.

[catsoc]

All right,

 

Thanks a lot Chugs102!

 

The CU's around me have a $20 annual fee although usually graduated to unsecured after timely payments. I do think that it would be good to join a CU for the reasons that you stated. Was interested in DCU but extremely wary of their 2 hard inquiries for membership/credit card as well as high denial rates. I read a post from someone who had 4 hard inquiries from there.

 

Amazing how much time can go by learning information about credit and credit repair and taking action.

[New2repair]

You want 3 open credit card accounts. YOu did not specify what the open accounts were. If you have 3, no need for more. Just make sure to pay pay pay on time every month, that is more important than anything else at this point. 555 on CK is much higher than I was a year ago. Keep at it, and look into getting a PFD on that CA

[catsoc]

Thanks. Argh, I miscounted on the open accounts. I have 2 open credit card accounts (Discover and Visa) with high limits but I am an authorized user for both.

 

You want 3 open credit card accounts. YOu did not specify what the open accounts were. If you have 3, no need for more. Just make sure to pay pay pay on time every month, that is more important than anything else at this point. 555 on CK is much higher than I was a year ago. Keep at it, and look into getting a PFD on that CA

Edited April 25, 2013 by catsoc

[chugs102]

Thanks. Argh, I miscounted on the open accounts. I have 2 open credit card accounts (Discover and Visa) with high limits but I am an authorized user for both.

 

 

You need to get your own accounts and start building.

[catsoc]

So San Diego County Credit Union got a hard pull using EX. I had a credit score of 660. The rep that I was working with could clearly see that I was doing the right steps. Said what the hell and applied for their regular credit card instead of Secured since they already hard pulled. Declined. Applied for their secured cc with 120% deposit. Had $600 cash in hand for a $500 secured card. Underwriter's reviewed and declined primarily due to a 2008 cc CO that I'm 2/3 of the way paying through. Called for recon and declined. F SDCCU & FML.

 

At this rate, I fully expect nothing to work. Sears, which I need off my record seems notorious lately for being immune to GW letters, and the *Admin removes vulgarity* open CA well within SOL has for what I can see NEVER accepted a PFD. If anyone has the inside on Fair Collections and Outsourcing, please let me know before I waste my money and time firing off useless letters to them and the CRAs CMRRR. Looks like I'll just have to get used to being a spectator for the next 2-5 years while my peers and friends and family go about living a fun and productive life. Wonderful.

[phoenixisrising]

1. DON'T pay the CA's CO yet!! Per your original post, you already paid and are working on paying other CO's. Send a PFD without a check, wait to get it in writing that they will remove the trade once paid. Once you have that in hand, send a MO not a check. These are not within SOL right? If it's out of SOL what I said applies. Each fix on those will really help your score.

 

2. Have you gone over all three reports?

 

3.Goodwill apt.

 

4. Cheer up! you can do this!

 

ps. It might help everyone if you turn everything into a list so it's easy to read.

Edited April 26, 2013 by phoenixisrising

[catsoc]

Hi Phoenix. The first CO for the Sears/Citi store card was paid without DV letter or anything. My fault on that; I didn't know what I was doing at the time. Outside of one of either: dispute/nutcase, goodwill.

 

The second charge off was for Capital One cc for around 3k. I was more prepared for that one. It's a law firm that is a CA that worked on behalf of Cap 1 from what I can gather. They answered DV, declined PFD, offered to settle for 2/3 of the amount. Out of the options that I knew especially cause SOL, I agreed in writing to pay in full cause I wanted notation to say PIF vs. settlement.

 

Add the collection with Fair Collections and Outsourcing and, well, all three of the really terribles on my report are hardasses that will compel me to drive old car and live with roommate cause no one would want me with my credit history. I'm just waiting for the SDFCU rejection tomorrow and the Cap 1 cc rejection in 7-10 business days.

Edited April 26, 2013 by catsoc

[phoenixisrising]

Sea rs - do they have it as paid settled? I would dispute with CRA for removal. Send CM and wait for them to respond.

 

Crap 1 - well it's all you can do, it's in SOL. Be kind, maybe you can get it removed. Although, could be a tough. Just be sure to have hard copies of what they have for tradeline on your reports before and after. Don't forget a clear cut receipt that it is paid in full and settled.

 

Fair Col and Outso urcing, are they two separate CA's? Is it within SOL? Did they send any letters or such to you? Have you DV'd them?

[catsoc]

Sears comes up as "Paid, Closed. $xxx written off"

 

My hope for Crap 1 is a GW in the future with maybe one of their cc's on my account to help the cause. Doubtful no matter the case with Crap 1. I'll be sure to request the receipt. The firm working on the case seems to be very civil and business like as they are a law office. I'm sure that it shouldn't be an issue. My recon call with the CU earlier mentioned how the TR is being updated as CO until I pay the account off and that is hurting me a lot. It's basically been showing as CO for the last 3 years.

 

Fail Collections and Outsourcing is one CA. It is well within SOL. 2 years left on SOL. 5 years left on CR. I have not received any letters from them. I don't think any calls either unless they left a message. They may have called; I really couldn't say. They don't seem to care about me as far as I can tell. According to some posts that I've read online, they don't even seem to care if they get paid. I have not DV'd them yet. I was trying to work with OC at first, but OC sent it off and can't do anything about it now according to them. I haven't found one successful PFD experience online regarding them even for large amounts. They don't seem to settle either for large amounts. The phrase 'they don't seem to care if they get paid' pops up around these times. Only minor success has come from disputes, I guess. Any successes have been real outliers.

[phoenixisrising]

For Se ars dispute with CRA's. if it comes back verified, send an MOV, it may come off.

 

Crap 1 must have been sold. I would settle this as it's a CO. I can't foresee a PFD within SOL so a GW might be a civil approach.

 

Fair and Out sourcing it's within SOL and they say it's best to let sleeping beasts lay especially if its a large amount. If it's something you're will to pay off rather then wait, send them a DV to the address on your hard copy reports. Before you do this consider the ramifications of potentially being sued if you wake the beast and don't want to pay. No matter, never trust a word unless you can read it.

[catsoc]

Hmm, interesting. I'm going to have to read into the MOV approach. Disputing kills any GW attempt correct cause I don't see how an OC would have GW towards an account that was recently disputed, lol? And I'm assuming a GW letter first followed by a dispute be detrimental to me as it is admission of valid debt?

 

I'll definitely have everything in writing. Thanks

[catsoc]

Hello all. My oh my, I can't believe it's been almost 2 years since I made my post. Back then, I had a gf, no credit card to my name, and a lot of despair as I saw no hope. I've decided to update you all on my credit situation. I have no gf, my life is still an F-up, but my credit situation had improved.

 

2 years ago my Fako from credit karma was at 555. I posted here, updated my credit reports, went to a credit union the next day, and was rejected for a secured credit card with said company. I called for a recon and was rejected again. Felt like a moron. I then sought to apply for secured cards online, I think Capital One was a popular choice at the time. Seeing as how one of my major baddies was with them; I was praying that I wasn't blacklisted with them. I agonized about the secured card as I really didn't want to have to pay a fee and have what would essentially be a useless card. I opted to apply instead for their Newcomers credit card with 1% rewards, which was on their lower end. Didn't think that I'd really have a shot at it, and agonized over applying with the online csr for about an hour. I submitted the application and got one of those, we need more time to process your application messages. So I figured, no dice for that one.

 

I called 2 days later for the purpose of a recon and when connected with a csr, he checked to see if my application was updated, and BOOM, it had been approved. I was nearly moved to tears that first I was approved, and second that Capital One gave me another shot.

 

I received my card and vowed that I would always pay on time no matter what. I've had this card nearly 2 years, and never one missed a payment (and I've had done miserable times when I could barely just scrape together the minimum payment), and for the first year and half paid my balance in full.

 

Today, my credit score is at 680. My high was 710 a couple months ago. I'm not sure why it's gone down so much. 2 minor baddies have turned into positives. 2 major baddies, which now show pif will be off my report at the end of the year. Goodwill letter was useless at getting those removed. The remaining major baddie; I'm leaving alone as it doesn't seem to be reporting to the bureaus (knock on wood), and it is a very small amount. My Capital One credit card has been upgraded to the Quicksilver card. I've also been recently approved for a Chase Freedom Visa signature, Discover It, Citi Double Cash, and Sally Mae world MasterCard.

 

I'm so thankful this board was around and got me motivated 2 years ago to fix at least one mess in my screwed up life. I am updating this to provide an ending of sorts to my post, to thank those that read and provided feedback, and to give hope to others in a similar predicament of great despair that things can get better with some time, patience, and the resolve to manage your debt.

[casemodgod]

Glad to hear it, you still have roads to plow, so stay the course and best of luck keeping up with the right things.

 

Time will heal all the wounds in this story, just keep on keepin on.