Here's the deal: My husband & I are planning to apply for a mortgage in about 7-8months. I have cleared every negative item from my husband's CRs. He has literally 0 positive accounts (there weren't any when I came into the picture) & 0 negative accounts on all 3 CRs. I have done virtually the same thing to my own (I also have 0 positive accounts on my CR), except a repo last reported to the CRA 06/08. The only thing I have done in regards to this account is write a "do not call or contact" letter to the collection agency about 2 years ago because the calls were making me crazy! I have not tried to negotiate down the amount owed or anything like that. We are planning on getting a secured credit card to add a positive account to each of our CRs. But as far as the repo goes, "morally" I know I am responsible for the debt, but other than making a settlement in exchange for removing the account, what else can I do to get rid of it. Also, the original loan was to HSBC, who sold it to a collection agency. The collection agency collection was removed from my CR, but not the original debt account. It is now a Charge Off showing $0 for the balance. If I should pay this off, how much & to who? Any advice would be great. Thanks!
Adding secured credit cards to your credit profiles will be a good way to build some positive payment history and start improving your FICO scores. That said, based upon the information you've given, I think you may need more than 7-8 months before you're ready to apply for the mortgage. Where do you FICO credit scores currently stand? Regarding the repo that's on your credit reports, it sounds like it must still be in the hands of the collection agency that purchased it. The OC is showing a charge off with a $0 balance, and if you contact them, they won't want anything to do with you. They'll just tell you to contact the CA since they've sold the debt and moved on. What was the last communication you received from the CA?
JoshuaHeckathorn- Thanks for your reply The CA that bought the debt from HSBC is not showing up on my CRs. I haven't had any contact with the CA for at least 2 years & I don't remember the name of the company.
Hi samj! Just because the CA isn't showing up on your credit reports doesn't mean they don't own your debt any longer. They either still do, or they've sold it off to another CA that hasn't yet reported the debt on your credit reports as a new collection. Unfortunately, HSBC probably isn't going to do anything for you in regards to the charge off. That's exactly what it was for them, and the best you can really do is either dispute something that's inaccurate regarding the charge off via the CRAs or send them a Goodwill letter requesting removal. I don't know if the Goodwill letter would be a good option considering it was a repo and the debt still hasn't been paid.
That is the answer I feared the most. I have an an appointment with a mortgage broker who is willing to give us advice next week. I am gonna wait until then to decide is I should try to hunt down the CA that owns the debt and pay it off or what. Thanks again!
The secure cards are a great way to start building your own credit. You can also help your credit score with authorized user accounts. Ask a friend or family member to add you as an authorized user to one of their existing credit card accounts. The credit card must have perfect payment history and they must be able to maintain a low balance (10% or less of the credit limit). The higher the credit limit and the longer the payment history the better the results with the authorized user account. I hope this helps! Thanks! Heather with BoostMyScore.NET
Be cautious when dealing with mortgage brokers. A lot of them act like they're credit gurus, but in reality all they care about is getting the deal done on your loan. That's where their incentive lies.
