I've got negatives on my CR from Capital One, Bank of America and Providian. They are all paid charge-offs, taken care of before I started reading this good board. Is there any strategy for removing them? I am thinking of writing goodwill letters, but not sure if that's the best route. How will mortgage lenders view these trade lines? They are all paid off, but only about a year ago. Thanks
I would assume that your scores have rebounded since these derogatory items? With a decent score, automated underwriting should approve you, and you shouldn't need any LOX. How long did you have the accounts in question? Keep in mind that if you have an account with several years of history, this can help your scoring...and if you blow the tradeline away entirely, your score can then drop.
Yeah, I was at 560's a year ago and about 650's now. I hadn't considered that the age of these accounts was playing into the scoring. The BofA (was MBNA) is about 10 years old. The others are 5-6 years old. It sucks to be basically out of debt, except for student loans, making on-time payments on everything, not carrying any balances, and still be stuck by these scores. We want to look for a house in 6 months and I'm getting a little nervous about my history. Thanks for your help.
You would probably be a good candidate for a "Community" mortgage...I've gotten approvals for those at 100% financing, even in the mid/upper 500s. It's designed for median-income borrowers, with rates near-conforming and usually fixed-rate. A possible downside could be the student loans, even if they are deferred they have to be counted toward DTI. PM me if you might be interested in discussing further!
The above poster is pretty much spot-on here. With most community programs they disregard anything under 5k in delinquencies. 650 mid-score will probably yield about a 9% APR with 100% on a 39yr fixed but watch the closing fees if you can't pawn them off on a seller. Chase is the most aggressive in your demographic right now. They are literally closing deals for $500.00 . . . strange but, true. With that said, you have six months to play with so why not get at least Capital One and Bank of America off there. With the charge-off's still so recent, I'd be willing to bet that removing the accounts alltogether would still benefit your scores despite the history associated with them. For Capital One, submit a complaint to the Virginia Corporation Commission. Therein, tell them that Capital One fails to remark that the account is in dispute. That will usually be enough. For Bank of America, try a goodwill letter and if that fails, dispute the account "status" and balance history fields. Also make sure that they are reporting a date of status and initial delinquency on Equifax. If not, dispute those and you may get it deleted. You'll have to sue Providian insofar as they never correctly report the status field and FICO dings you for it.
