I think I was given some incorrect info

[sharizap]

Hi

This is my first post. I found this website a couple of days ago and have been reading obsessively ever since. What a relief to find good, clear-headed info and not feel embarrassed and like I have to apologize or explain how I got into this situation! I've learned a lot- I've read through a lot of the stickies and posts, figured out the search features and followed links to other resources. So having said that, I have one initial question and a few more specific questions that I'll post separately.

My husband and I both have scores in the mid-500s, with mine slightly lower than his; mostly cc charge-offs, medical bills, a tax lien, a default judgement, and a few past due utility bills. We've been trying to get things figured out a little at a time but hadn't really made an organized plan or effort and hadn't made much progress.

Recently we had an opportunity to do a rent-to-purchase on a house with a friend who wanted out of his mortgage. It's not your standard RTO; we pay his mortgage ourselves and we have about a year to get our finances in line and find our own mortgage which will be the remaining balance of his mortgage. If it takes a little longer that won't be a problem but I'd rather get it settled sooner than later.

I've been working with a woman with whom I've been acquainted for a few years. She specializes in hard-to-finance cases with Fidelity Mortgage. She pulled both our CRs and sent them to me. Her advice is for me to start with the smallest accounts (some of them are embarrassingly small amounts like $15-60) and just call up and pay them- "get them off there" as she put it. She said to make sure I got receipts and/or letters of payment. I'm to work my way up to the bigger ones, which she said I should handle by calling them and asking for a lump-sum settlement offer, if I could afford to pay that, or making payment arrangements. As these accounts are settled, I'm to send her the letters and receipts and she's promised to send a letter to all the CRAs to have the negative marks removed. She asserts that by following this formula, I should be able to raise our scores enough by the end of summer that she'll be able to get us into a mortgage with no trouble. She also thinks I'll be able to find a better deal on a car loan this fall by doing this process. She also insists that it doesn't matter at all whether the payment is partial or full, whether it was settled, etc. She said that WILL NOT affect my score, and it will continue to rise as these issues are tackled.

It seemed so simple, and I dug right in. I paid off most of the smaller debts and have been collecting receipts, but now it's time to start on the bigger ones where I have to think more about the amounts I'm spending and what will be most effective.

From what I'm reading here, her process won't have as quick an effect as she led me to believe, right? From reading all the info here, it seems that by taking a few extra steps on my own it might take me a little longer but I can build a better credit score than by what she's told me. I don't think she's a bad person, and I know that ultimately her goal is to sell me a mortgage. And her primary agenda- despite the cheerleading and encouragement- is to improve me only as far as I'll need for her to get me financeable with her company. The GOOD news is that by encouraging me as she has, she's gotten me started on this road. I just want to make sure I'm donig it "right." If there are shortcuts, I'm all for it- I just don't want to take them at the expense of creating or ignoring bigger problems ahead.

[SecretAgentWoman]

Read the primer sticky, start working in that direction instead. Paid collections score no higher than unpaid collections.

[chilton1]

Welcome, to CIC

Have you paid any of the accounts as yet? Try to get a Paid in Full Delete (PFD) when you pay. If you have already paid and it is listed as a paid collection you may want to try writing a goodwill letter to the creditor to see if they would be willing to delete the negative.

Paid collections generally cause your scores to decrease, mine took nose dive when I paid. Your scores can go up much faster if you get the delete. I think with mortgage companies you have to have all the outstanding accounts paid before they will issue you a loan. This is why she is pushing for the payments to be made. good luck

chilton1

[MadinKS]

Welcome to the board. As you will soon find out, there will be varying opinions on the best road to travel when you set out to repair your credit. Unfortunately, there really is no "shortcut". If it were me, I would start by disputing all the negative TL's w/the CRA's. Then when the results come back you'll have a better idea of what needs to be done because you have a chance at getting some of the remaining negs. deleted before even having to tackle them. It could happen. Have you started that process? If not, order each individual CR from https://www.annualcreditreport.com/cra/index.jsp

Now, maybe you should talk to your friend and ask her if the negs. have to show paid or they need to be removed completely. A lot of times the mortgage companies only want to see that you have taken care of the negatives because they know that it's nearly impossible to have them removed once they're there. If you do go about settling these debts, be sure to have everything in writing, preferably a PFD, and DO NOT call these CA's. They will try and say anything to separate you from your money. They don't care 2 poos about you, or your circumstance, and if you tell them you are trying to get a mortgage, you'll give them the leverage they need to get the most money. DO NOT TELL THEM ABOUT THE MORTGAGE. If you need more information you know where we are. Welcome again and best of luck.

[MadinKS]

Man, SAW! You are quick. You beat me again!

[SecretAgentWoman]

Aw, it's ok. Maybe next time...

[MadinKS]

It's on now.

[sharizap]

She said it was perfectly fine to do all of this on the phone, so I've made several inquiries already, and a few payments using my personal debit card, which she also assured me was perfectly ok, safe, fine, etc.

And another thing she advised me to do was to get a secured CC, which I also did immediately. Now I'm reading that ALL of these things are BAD. How much damage have I done already?? The payments I made were mostly for outstanding medical bills, with one or two to CAs for things like cable bills, sprint, and maybe another medical that went into collection. Now I realize that with the companies that hold more than one account, they can now garnish my bank accounts for the rest of the money for the other accounts!!

*feeling suddenly very overwhelmed*

[IHateCAs]

And another thing she advised me to do was to get a secured CC, which I also did immediately. Now I'm reading that ALL of these things are BAD. How much damage have I done already??

Secured cards are not bad, per se.

The payments I made were mostly for outstanding medical bills, with one or two to CAs for things like cable bills, sprint, and maybe another medical that went into collection. Now I realize that with the companies that hold more than one account, they can now garnish my bank accounts for the rest of the money for the other accounts!!

This is incorrect. They cannot just go in and take funds out of your bank account because you paid on another debt they hold (unless they have a judgment against you).

Not legally at least. It is actually possible for them to do so, and you always have to account for the sleaziness of anyone you do business with.

[sharizap]

Have you paid any of the accounts as yet?

I have paid a few, mostly small amounts for medical but a few were with CAs for things like Sprint, cable bills, things like that. I'm concerned because she (the mortgage person) told me it was perfectly fine to do this by phone, using my debit card, that there was no way for them to use that info or make it public, etc, and now I'm really concerned that I've done more harm than good.