A newbie looking for direction.

I don't have many answers for you - but just wanted to say welcome to the board.

I would dispute the late pays with the CRA's. There is a good chance that they won't verify (I had a 90 day late on my home loan and all three updated it to "never late"). That's where I would start. Get some more opinions, though, because I am pretty newbie too.

Again, welcome!

 

My 2 cents:

You could dispute the charge off, but you might "wake the sleeping giant". The charge off is whats killing your score though. I would want a middle score of at least 660+ before I would try and get a mortgage. Tell us more about the chargeoff. Is is paid or unpaid? How much do you owe? Who is it with? Is the SOL up on the debt? If it's falling of in 8 mos and you want to buy in 6 mos, you either are going to have to pay for removal or dispute it or wait.

I would definately dispute the Shell and car as never late. If that doesn't work you could try the goodwill letter or nutcase letter with the creditor.

 

Try to not apply for that mortgage for at least the next 6 months. That's about how long it'll take until the effect of the late car payment to start wearing off.

 

Also, JP, you should not apply for any credit in the next 6 months. The Hard Inquiries will likely bring your score down, depending on the rest of your profile. I don't think mortgage companies like to see 'new' lines of credit anyway.

What debt you do have on credit cards and installment loans is also a big factor in your scores. Try to pay them down as much as possible. Don't go out and buy drapes and furniture until AFTER closing. Many people have made the mistake of stocking up on new household items before closing and have gotten burned. Always be aware that the mortgage company can pull your credit again just before the final closing.

As to closing credit cards I wouldn't do it. The 'ratio' of debt to credit limit is a very big factor in scores. If you close some of your credit card accounts your debt ratio may go up and trigger downward movement in your score. Mortgage brokers will often recommend closing accounts but depending on your ratios that strategy can, and often does, backfire. The only ones that make sense to close are small credit limit retail cards - but try to keep at least one of the retail type cards open as FICO also figures in a matrix for credit type mix.

Good luck!

 

Disputing is pretty easy. Experian and TU you can do online. And depending on if you're serviced by an Equifax affiliate or not, you can dispute EQ online as well. If you start a dispute on the EQ page, it will tell you who your affiliate is, if there is one for you, or let you start the dispute.

TU Disputes: http://www.transunion.com/content/page.jsp?id=/personalsolutions/general/data/DisputeOnline.xml

EX Disputes: http://www.experian.com/consumer/index.html
click on "request an investigation"

EQ Disputes: https://www.econsumer.equifax.com/webapp/ConsumerProducts/pgInvestigation

What I would do is dispute the lates and the pd chgoff on all 3 and see what happens. I would dispute the chgoff as "not mine" or "no knowlege.." and the lates as "never late". Then in 30 days you'll know if you have to go further. With luck, the chgoff is so old, that they won't even verify it, and it'll be deleted. You could get lucky on the lates, although they are more current, so they will probably be verified.

The problem here is, I don't know if the chgoff alone, going away, will boost your score above 660. The credit card lates are fairly current and could be hurting more than the old pd chgoff. But you won't know for sure until you try.

The goodwill letter is a letter begging forgiveness and pleading for removal. This would be a good one to use on Shell if the dispute fails.

The nutcase letter is more of a "I'm a nutcase and could possible maybe sue you because you may have made a mistake" kind of letter.

Here are 2 links that explain and include the nutcase letter (all revisions).
Link 1 and Link 2

I'll post some links to some goodwill letters in a bit.
Psychdoc's goodwill letter
Marci's goodwill letter

 

We had the exact same thing with a Citi chargeoff. We faxed the goodwill letter to them and they deleted the account entirely within about 2 weeks even though it showed a small balance as still being owed.

Citi proved to be our biggest success overall. A couple of months later we had a 17,500 credit line with them and now have about 30K with them.

Here's the letter we faxed. Thanks I believe go to Marci for developing the original "goodwill letter." Ours is an adaptation of it with a LOT of detail specific to our situation. If you'll do a search for "goodwill letter" I'm sure you'll be able to locate the original.

I don't know about the experiences of others, but Citi will have our first loyalty for a LONG time.

Here's the letter we sent. If you can adapt it to suit your purposes, please feel free.

DemPooches




Date


Citibank Credit Bureau Disputes
P.O. Box 6241
Sioux Falls, SD 57117
Fax : 605-330-6780


Re : DemPooches
SSN XXX-XX-XXXX
Account # XXXXXXXXXXXXXXXâ?¦ (From Experian Credit Report)

Dear Citibank,

For several years now I have been diligently working toward handling credit responsibly and improving my credit bureau scores. I am hoping that Citibank might be willing to help me in this regard.

I opened a Citibank account in 1991 when I was still a college student. To say the least, I did not handle the account responsibly.

Iâ??m not extremely clear on the details but I think this was what transpired -- I believe the account was charged off in 1994 or 1995. I think it was in 1998 when I received an offer to pay some portion of the balance in return for no further collection action being taken. I donâ??t remember whether this communication was directly with Citibank or with a collection agency, but at this point it really doesnâ??t matter.

As I indicated, I am working very hard toward having an excellent credit picture. I realize this charge off is old enough that it doesnâ??t have a huge impact on my credit score, but I would still like to make things right. My Experian credit report indicates there is a balance of $528 which still shows as past due on my Citibank account. I am more than willing to pay this balance.

Would you be willing to :

1. Let me pay the outstanding balance
2. Update my Experian (as well as Equifax and Trans Union if you use them) credit record for Citibank to reflect Pays As Agreed.
3. Consider reactivating my old Citibank account and allowing me a credit line with Citibank (anything would be appreciated) so I can show you the dramatic difference in how I handle my financial obligations now?

If you will do a check of my credit bureau reports, youâ??ll see the change.

I currently hold Citgo, Amoco, Shell and Texaco gas cards issued through the Associates, which I think is now owned by Citibank. I also hold a Phillips 66 Mastercard, also issued through the Associates. While the credit lines are not large, I believe you will see I have a perfect payment record on all of these accounts, as well as on all of my other credit card accounts for the past 3 years.

I have just paid off a $3600 balance with Nextcard and closed that account. I have also just paid off a $7600 balance with Providian and plan to close that account also as soon as I can replace the credit line with something else which has a reasonable interest rate.

The only negatives on my current record are 3 released state tax liens paid about 18 months ago. I have a paid car loan with Chrysler Financial another with Carolina First Bank as well as an open car loan and mortgage with Carolina First Bank, all of which have perfect payment records.

My credit needs are now primarily for business purposes and I am hoping as my credit picture continues to improve I will have access to significant credit lines to allow for some expansions Iâ??d like to make.

Anything you can do to help me in this regard will be greatly appreciated. Please let me know if there is anything I am able to do to correct my past errors with my Citibank account.


Sincerely,


DemPooches
Address

 

I would still send it. You talked to a customer service rep, they won't be the one who receives the letter. They have the ability to remove the lates, its just a matter of someone understanding receiving it.

 

That is a great letter DemPooches. Very personal and to the point. One of the better goodwill letters I've seen. One question though...why did you choose to go the good will route instead of having it drop off your account. Did you just really want the Citi card? When did you fax this letter to them.

 

rblues,

We faxed the letter Dec 31, 2001. We received the response from them via mail on January 8. We applied online and were approved for two Citi cards around Jan 23 and combined them into the $17.5K Platinum Select which we had in hand by Jan 31, 2002.

The reason we went the goodwill route was twofold. First, we strongly believe in paying what we owe and wanted to make the offer to pay. Others feel differently and that is certainly their option, but this was a driving force for us.

The second reason was that yes, we REALLY wanted the account with Citi. Others were getting great CLs through the BDD and we wanted to give it a try.

Interestingly, the old account info does still appear somewhere in Citi's system because one of the CSR's once made some reference to the "real old account". But it has posed no problem whatsoever.


jpfair,

You need to make your decision about what letter and strategy is the best one for your personal circumstances. I would think the goodwill letter would be a good idea for both Shell and Citi, but only one at a time.

But before you send anything at all, you need to have spent enough time reading the board and studying the tactics so that you already know what your next step is going to be (if any) depending on what the results are.

You don't have a lot to lose with respect to sending the goodwill letter regarding the Citi account if you're willing to just wait until it falls off anyway in 8 months should the goodwill request be unsuccessful.

Be sure to let us know how it goes.

All the best!

DemPooches

 

If the lates are recent you may have a harder time getting them to "go away." Usually being able to point to a clean record for a while is helpful. Just make sure you are meticulous about paying everything on time from here on.

You could try adapting the letter to specifically speak to the fact that you are attempting to get your first mortgage and that you never realized how damaging those late payments could be.

When you're asking for a goodwill adjustment, I think the best approach is to be humble, accept responsibility, and explain any extenuating circumstances. Tell them how much you appreciate and enjoy using the account you currently have with them.

Hope this helps. It's now bedtime for all of dem pooches (and for me too.)

DemPooches

 

Firstly jp welcome to the board.

Let me work through each of the items on your list.

1) Chargeoff...if it is paid it will have minimal impact on your desire for a mortgage.

2) You credit card mix is not bad, though not optimal. As long as you keep you credit usage under 35% they should not pose a hardship.

3)Do you have any other debt beside what you have already mentioned? I am specifically meaning car loans or student loans or any other installment type debt.

4) What type and how much down payment are you considering.

5) What type of income do you have? Do you work for a company or are you self employed? If you are slef employed how long have you been so?

Depending on the answers, you may not need to wait 6-8 months before applying and still getting a prime rate.

Good luck in your home search.

fla-tan