Hello everyone! I am new to the board and wanting to find ways to better my credit score (itâ??s currently 632) as we are wanting to buy a house (our first) either late this year or early next. I plan to take the advice Iâ??ve seen suggested here and read all I can before starting this, however, I was hoping someone could give me some advice on a situation I have that might need immediate action. We had seven credit cards total, two with a zero balance and five that were maxed out completely. We were making payments and were occasionally late with payments. My inlaws had a financial situation that was about to change their income tax level and set up a trust fund that we could access. Last November, we paid off both our vehicles (approximately $22,000 total). In January, we paid off three of the credit cards (app $10,000). We have two credit cards left with a total balance of less than $10,000. We anticipate being able to pay those off completely within the next month. After that, we hope to use whatâ??s left in our trust as part of a downpayment on the house. The other bills left are some small medical bills (our oldest daughter is disabled which is part of why we are in a credit mess) and my student loan of $4,000 (which is current) that we will be paying ourselves. My problem is that one of our credit cards was closed due to nonpayment last summer. I thought it was set up to automatically come out of our checking account, but it wasnâ??t and I never bothered to open/read the statements they sent. My fault completely. When they called, I was several months behind and the account was closed. I brought the account current immediately and made double payments until we received money from the trust at which point I paid it off. In December, I received a nasty note from one of the credit cards with a zero balance stating that it was being closed for non-use and that this closing would be reported to the credit reporting agencies and would affect my application for future credit with them. Last week, one of the cards (Bank of America) that still has a $7,000 balance on it contacted me via letter and informed me that they would not be renewing our card at the end of February and the account has been closed. They said that they were doing this based on collections information on my credit report. I anticipate having the money to pay that card completely by the first week of March. I have already made Februaryâ??s payment to them (that one is set up electronically and has never been late or over the limit). Iâ??m worried that they will sell this loan to someone else for collection which might negatively impact my credit report as well as tack on collection fees. (Iâ??m also worried about the impact this will have on my credit score, which is why I am here on this site). Should I contact them and let them know that I can pay this amount in full soon? I donâ??t want to do that as my Mother in law (who is very nice but also very disorganized) is sometimes late in getting the money to us. I donâ??t push hard for it as I consider us fortunate to be receiving this in the first place, so I have to let things go at her pace. It would be just my luck to promise BofA the money and then have her ask if she can send it in April. Any thoughts on whether I am going to have some problems quickly with this? I can push the issue with her if I have to. I know I have other problems to address as well, but I hope to take care of those after reading some more (I've been lurking for a few days). Thank you for taking the time to read this. I look forward to reading and learning more here.
"In December, I received a nasty note from one of the credit cards with a zero balance stating that it was being closed for non-use and that this closing would be reported to the credit reporting agencies and would affect my application for future credit with them. " More likely they closed it due to the other negatives on your reports. Plenty of people have accounts they use only occasionally, and get balance transfers or other offers to encourage use, not closure and a letter telling you they don't want your business. It costs them about $100 of mailing and credit approval costs to find one new customer. If the BofA account payments are current, even if they have closed the account to new purchases, it should not be sent to collections, or reported as a collection account, as you and they still have a contract calling for minimum payments, and you have met the obligations of that contract. It is not late, nor is it charged off. The existing card terms should apply until you pay it off. What unpaid collection accounts remain, and what negatives show on your reports? What remaining open CC accounts do you have, that you want to preserve to use in rebuilding credit?
Ontrack, thanks for replying. Itâ??s a relief to know that I should have a bit of time to pay off BofA. â??What unpaid collection accounts remainâ? I only have one unpaid collection for $68 that will be paid in full next month (medical bill). I have one or two others on my credit report that Iâ??m just now trying to figure out if itâ??s still owed. â??â?¦and what negatives show on your reports?â? I am only now starting to look at my credit reports so I may have more negatives as I look at other credit reporting agencies. I need to pull reports for both myself and my husband from all three agencies and try to organize them. Here is what I have from one of mine and all of his. On my husbandâ??s report (and mine), we have seven â??Payment after charge off/collectionâ?? for medical bills from the same collection agency. These were for several tests for my daughter that we couldnâ??t afford to pay at the time. I made arrangements with this agency to pay a set amount each month. They said that it would only pay on one collection at a time rather than payments on all of them as each one was listed separately. We have one left that will be paid next month when I make the payment (mentioned above). The rest state that itâ??s paid and closed. We have one â??Account closed by credit grantor â?? maximum delinquency of 60 daysâ?? for a credit card. This was paid off last month, one of the credit cards that was closed. I donâ??t have anything else listed on the credit report for my husband under the potentially negative. However, I donâ??t think the BofA credit card is reflected there yet. There are only four inquiries for credit and they should all fall off this year. The other credit cards state that we pay as agreed and no late payments. (Note- I know that I have been late with some of the cards on occasion, but it doesnâ??t appear to be reflected on the credit reports that I do have at the moment.) The credit card that was closed to non-use (according to them) is not listed as a negative. My credit report has a collection that Iâ??m not sure if it has been paid or not. It states the balance and past due is $0 however, it says that it is placed for collection, rather than paid. There are three other medical bill collections that have been paid and it states that it is a paid collection. Last, I have a profit/loss writeoff to an apartment complex that I lived in with a roommate at least 12 years ago. The roommate moved and I couldnâ??t afford to stay there. I spoke to the apartment complex and they stated that if I paid for half of what was owed (nearly $500) they would not pursue me for the rest of the bill. I paid, but itâ??s apparently still on there since my roommate did not pay her half. Iâ??m not sure how they came by the dates they did, but I also donâ??t know how long they have to report the debt as a current debt, etc. It will be removed in Sept of 2008. Itâ??s for $450 and honestly, if I thought it would help I would go ahead and pay it, but Iâ??m afraid that would just restart the clock. I have one inquiry on my credit report. â??What remaining open CC accounts do you have, that you want to preserve to use in rebuilding credit?â? I have four credit card accounts that are open. One has never been used and I donâ??t know that I have a card for it. I have Household Bank, Discover and Capital One cards. Thanks
"Last, I have a profit/loss writeoff to an apartment complex that I lived in with a roommate at least 12 years ago. The roommate moved and I couldnâ??t afford to stay there. I spoke to the apartment complex and they stated that if I paid for half of what was owed (nearly $500) they would not pursue me for the rest of the bill. I paid, but itâ??s apparently still on there since my roommate did not pay her half. Iâ??m not sure how they came by the dates they did, but I also donâ??t know how long they have to report the debt as a current debt, etc. It will be removed in Sept of 2008. Itâ??s for $450 and honestly, if I thought it would help I would go ahead and pay it, but Iâ??m afraid that would just restart the clock." If it first went delinquent 12 years ago, it should have fallen off your reports 4 or 5 years ago. Paying any amount, whether to the OC, or even to a CA, cannot change the date of first delinquency which determines the FCRA allowed 7 year credit report reporting period. They may be erroneously reporting the delinquency date as the date of your payment, and they have not honored their agreement to hold you responsible for half. Dispute it thru the CRA as "obsolete", and as no balance due. If they still verify, claiming it will fall off in 2008, the OC is reporting erroneously. You would then send them a letter demanding immediate removal, and if that doesn't work, sue them in small claims for violating FCRA. Under FCRA, suit can be in any court with jurisdiction, which includes small claims where you live even if the apartment complex was in another state. It looks like you have enough remaining cards to rebuild once you get your debts paid off. What are your scores? Never mind. 632. Get your debts paid off, and any other errors removed, then take another look.
Ontrack, thanks again. Iâ??m not really sure what the deal is with the apartment complex. This past week was the first time I had ever seen my credit report and Iâ??m guessing that might be the reason my husband finally applied for apartments only in his name. We never could seem to get approved with my credit. It states: Date Opened: 02/1994 Date Verified: 10/2001 >Charged off as Bad Debt< Remarks: Profit and Loss writeoff Estimated date that this item will be removed: 09/2008 So, it was verified seven years after it went delinquent? And it states (apparently) that I have to wait another seven years? Iâ??ll follow your recommendations for it, but please post again if any information that I just posted would change anything. Frankly, I doubt that anyone there would remember the verbal agreement (I know, bad move) that we had. Good grief, I probably canâ??t find any paperwork from 1994. BTW, Iâ??m in the same state still. Iâ??ll dispute that and finish clearing up my debts and check my scores again. Thank you.
