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Please help me out from under old debt - Trying to purchase a home for family


dollerprod
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Hi, I am trying to improve my scores and reports in order to buy a home. Only have 3 months until lease runs out.

 

I basically have these derogatories on my report:

  • 2 Old Secured CC's, defaulted them both at the same time (March 2007)
  • About 3 Emergency medical visits @ $190 each (2007 also)
  • $85 from a lab (It was paid, I can prove this and handle this one on my own)
  • $380 cable (My fault, moved out of house and forgot to turn off, ex roomates continued to enjoy cable/ deciding what to do about this)
     
  • Problem is, don't have a lot of positive history to offset.

 

So that's what's on my report. What I am concerned about is the two Old secured CC's first. Also the different ways they are listed on the 3 reports (both in "accounts section" on EQ and one in "accounts section" and other in "collections section" on TU.

 

Also they seem to show the whole line of credit being owed, when the cards were not maxed out to the dollar (or anywhere near it) and being that they were secured CC's that I had to deposit $ to obtain card, shouldn't that be subtracted?

 

So, it's past SOL right? (FL)

Do I send DV letter to CA? Or Zombie debt letter? Confused which one because of this flowchart

Do I also need to dispute it with credit bureau simultaneously? 

 

I don't know what I should be doing? I haven't had any problems for many years but this old debt is haunting me and I am just trying to move on and don't know where to go from here.. Any help you can offer is much appreciated!

 

For your enjoyment I have put up copies of my reports from myfico.com on Dropbox. You can find them here

http://dropbox.com/sh/zg7qy2nl5ifunjv/xJeD2pSpXl

 

 

 

 

 

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Not to be Debbie Downer but the chances of your being able to buy a home in the next 90 days with few positive trade lines and that much negative information is slim to none.  The first thing you need to do is get working on building a bigger positive credit history while battling the negative information.  Without a FICO of at least mid600s or low 700s you will pay astronomical interest if a bank will even finance the loan.

 

Next these aren't "zombie debt" as they are still within the 7.5 year reporting time for credit reports.  Zombie debt is anything older than that in which they cannot legally put it on your credit report.  

 

Pay for Delete on some of the smaller debts is entirely possible and since the debt may have been sold several times over you can probably settle for 25-30% of the original amount.  You can DV the rest of it but I would be prepared to pay something.  The DV process could take a lot longer if the creditors and CAs dig in for the long haul.  Especially if they know you want to buy a house.  

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Not to be Debbie Downer but the chances of your being able to buy a home in the next 90 days with few positive trade lines and that much negative information is slim to none.  The first thing you need to do is get working on building a bigger positive credit history while battling the negative information.  Without a FICO of at least mid600s or low 700s you will pay astronomical interest if a bank will even finance the loan.

I thought that FHA loan was do-able with lower-mid 600's....

 

 

Next these aren't "zombie debt" as they are still within the 7.5 year reporting time for credit reports.  Zombie debt is anything older than that in which they cannot legally put it on your credit report.  

Ok I thought that the flowchart was saying "Past SOL (FL 5 yrs) = Send Zombie Debt Letter.

DebtValidationBig.jpg

 

 

Pay for Delete on some of the smaller debts is entirely possible and since the debt may have been sold several times over you can probably settle for 25-30% of the original amount.  You can DV the rest of it but I would be prepared to pay something.  The DV process could take a lot longer if the creditors and CAs dig in for the long haul.  Especially if they know you want to buy a house.  

They won't know I want to buy a house. I have not applied yet. And I thought the DV process couldn't take longer than 30 days (or something like that) because that was the length of time they have to respond according to the FDCPA?

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Do-able: yes.  Likely:  no.  Too much negative debt and too few positive debt means a very likely denial.  Larger positive debt, few negative and lower score:  better odds.

 

There are TWO SOLs to worry about:  one is for filing suit and in FL they can file suit for up to five years after DOFD.  The second SOL has NOTHING to do with the lawsuit and that is how long VALID debt can be reported on your credit report and that is 7.5 years.  So while you CAN dispute it, if the debt is legally yours they can report it on your credit reports for 7 years and 6 months.  It is not truly zombie debt until it is older than 7 years 6 months and they can no longer sue you OR report it to the CRAs.

 

While the DV process is supposed to take 30 days that is assuming they respond the way you want them to the first time around.  So you dispute on April 11.  They have until May 11 to respond.  Then you find out they verified everything and it STAYS.  Now you have to find another path and hope that works. 

 

While the ones on the report NOW may not know of your plan I guarantee you that your reports have been flagged behind the scenes by debt collectors you don't even know about.  When you apply for that mortgage they will get a notification and then stuff you aren't even aware of will appear on your credit reports.  When you are near closing and the bank pulls another report for closing they will find it and tell you to pay it or no house.  There won't be 30 days to start DV to get rid of the negative entries before closing and you either pay or you lose your house and the deposit.  

 

If you really want to do this right apply for a mortgage now and draw the cockroaches out of the wood work and deal with everything now. Work with a good broker who can advise you on how to clean up your credit so that you can get a house.

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Ok then well I did not know that about there being debt collectors that will be notified when I apply for home loan!! Although, I honestly do not believe there is anything else that I owe on that has not been reported.

 

One other question: What about the two old secured credit cards showing that I owe the full balance, when that is not the case. The cards were not maxed-out, or even close to it. Therefore, it does not reflect the true amount that is past due.

 

Could this be used to show that the CA is reporting inaccurate information and then be grounds for removal? 

 

Also, shouldn't the security deposit be deducted from the amount as well? It is not.

 

Please don't think I'm a deadbeat scumbag that doesn't pay his bills and take care of responsibilities. This is all due to a life circumstance that no one would be able to see coming. And by the time all was getting better, they had me under so many fees I couldn't bring myself to cough it up. Maybe I was bitter and I certainly was young and more naive. And I also justified not paying it under the fact that the cards were given to me by way of a security deposit which I made so it was not like they gave me a line of traditional credit and I took it and ran.

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Hello Dollarprod,

 

I have gone over all 3 of your credit reports, and ClydesMom is correct in telling you that you will not qualify for a Mortgage in the next 90 days. Your credit history is way to short. Please follow what I'm saying.

 

Yes, FHA will qualify a person within the 600 range, and sometimes lower, but it's not just about the score. You also have to have credit.

 

You're positive tradelines consist of:

1. A Capital One CC with a $500.00 credit limit open > 12 months. (This is a good thing.)

2. A Capital One CC with a $200.00 credit limit open < 12 months. (This won't count as a tradeline because it hasn't been open over 12 months.)

 

On the other hand, if you can show non-traditional credit that has been open for 12 months or more with a positive payment history....for instance:

1. Rent

2. Car Insurance

3. Cell Phone Bill

4. Gas Bill

5. Electric Bill

 

These things will help, if you can find a lender that will accept non-traditional credit, and you have been on the job or in the same occupation for over 2 years.

 

As far as these collections, with the exception of Credit Management for $392.00 which was assigned on 02/2010 to the collection agency, EVERYTHING ELSE will fall off of your credit reports next year. Maybe even the end of this year.

 

AR Resources $190.00: Both Accounts were ASSIGNED to the CA's in 05/07 & 11/07 which means the DOLA was before that.

 

Jefferson Capital $725.00: was ASSIGNED in 11/08 or 10/08, but the DOLA was 02/07.

 

Merchant Associates $85.00 ASSIGNED 11/07, DOLA before that date.

 

Central State Rec $190.00 ASSIGNED 12/06. DOLA before that date, will fall off this year.

 

I would not pay ANY OF THEM. Dispute them all with the Credit Bureas 1st. They are so old, there's a Great chance they will just delete them. If not, then send a DV letter to the CA's. I personally have never had anything linger on my credit report longer than 7 years.

 

These things will clean themselves off of your credit report. Start trying to build some credit. Save and put away as much money as you can in the bank. Keep paying your Capital One accounts on time, and don't let anything else go into collections.

 

Even if the Credit Management collection for $392.00 still lingers on your report after the other ones fall off, that won't stop you from getting a mortgage.

 

Just something to think about.

Hope this helps.

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So awesome of you to take your time to go over all that information and review my reports! I can't thank you enough! 

 

 

Hello Dollarprod,

 

I have gone over all 3 of your credit reports, and ClydesMom is correct in telling you that you will not qualify for a Mortgage in the next 90 days. Your credit history is way to short. Please follow what I'm saying.

:waah:

 

Yes, FHA will qualify a person within the 600 range, and sometimes lower, but it's not just about the score. You also have to have credit.

 

You're positive tradelines consist of:

1. A Capital One CC with a $500.00 credit limit open > 12 months. (This is a good thing.)

2. A Capital One CC with a $200.00 credit limit open < 12 months. (This won't count as a tradeline because it hasn't been open over 12 months.)

Almost makes me wish I didn't pay for my truck in cash. Then maybe I would have at least some positive to show...

 

 

 

On the other hand, if you can show non-traditional credit that has been open for 12 months or more with a positive payment history....for instance:

1. Rent

2. Car Insurance

3. Cell Phone Bill

4. Gas Bill

5. Electric Bill

 

These things will help, if you can find a lender that will accept non-traditional credit, and you have been on the job or in the same occupation for over 2 years.

Yeah I should be able to show all of that. I mean, $100,000's in bills has been paid on-time everytime(99%) over this time period of my credit report. What about the bank that I have been with for over 12 yrs? Would they be likely to accept non-traditional credit (small bank/ few branches)? They can see directly on my checking account ledgers the rent that has been paid for the last decade, always on time.

 

And, yes I have been on the same job for over 12 yrs and can show income flirting around $50,000 stable. 

 

 

As far as these collections, with the exception of Credit Management for $392.00 which was assigned on 02/2010 to the collection agency, EVERYTHING ELSE will fall off of your credit reports next year. Maybe even the end of this year.

 

AR Resources $190.00: Both Accounts were ASSIGNED to the CA's in 05/07 & 11/07 which means the DOLA was before that.

 

Jefferson Capital $725.00: was ASSIGNED in 11/08 or 10/08, but the DOLA was 02/07.

 

Merchant Associates $85.00 ASSIGNED 11/07, DOLA before that date.

 

Central State Rec $190.00 ASSIGNED 12/06. DOLA before that date, will fall off this year.

 

I would not pay ANY OF THEM. Dispute them all with the Credit Bureas 1st. They are so old, there's a Great chance they will just delete them. If not, then send a DV letter to the CA's. I personally have never had anything linger on my credit report longer than 7 years.

I should dispute them with the CRA first? What would I say for the dispute?

 

Or should I send a DV to the CA's first? Isn't this what's called for in the JackAttack or 1-2 punch methods I have been reading about the last couple days (CA DV first, then dispute with CRA)? 

 

 

 

These things will clean themselves off of your credit report. Start trying to build some credit. Save and put away as much money as you can in the bank. Keep paying your Capital One accounts on time, and don't let anything else go into collections.

Is there anything else that I can do to start building more credit quickly? Being an AU is not an option for me... Other than that? And yes, I will be saving, paying the cc's on time in full, and nothing else to collections!

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So awesome of you to take your time to go over all that information and review my reports! I can't thank you enough! 

 

 

:waah:

 

Almost makes me wish I didn't pay for my truck in cash. Then maybe I would have at least some positive to show...

 

You are so welcome. My husband used to pay everything in cash also, I had to get him out of that habit. Even if you were going to pay it off, at least let it report, even if it's for a month or two. He was about to buy a low priced property in cash...I said no, no, no. Go to the bank where our savings is, and take out a secured loan for the amount of the house...this is just so it will report on his credit report. He'll pay a little interest, but he can pay it off at anytime.

 

 

Yeah I should be able to show all of that. I mean, $100,000's in bills has been paid on-time everytime(99%) over this time period of my credit report. What about the bank that I have been with for over 12 yrs? Would they be likely to accept non-traditional credit (small bank/ few branches)? They can see directly on my checking account ledgers the rent that has been paid for the last decade, always on time.

 

And, yes I have been on the same job for over 12 yrs and can show income flirting around $50,000 stable. 

 

It wouldn't hurt to ask your bank. If you have proof of on time payments from numerous other bills, that will show a more complete picture. There are banks that will accept Alternative Credit. You being on your job that long is a great compensating factor, it shows stability. Nice and stable income also. Plus Plus Plus!

Also, those tiny medical accounts may be ignored all together. Your credit report does not tell your whole story. You are definitely not a lost cause. Although, like I said, dispute those accounts first. Inquire with your bank, but don't let them pull your credit, you still have work to do.

 

I should dispute them with the CRA first? What would I say for the dispute?

 

I would just ask them to verify the accuracy of these accounts. Maybe your insurance paid them, maybe you don't recognize them at all.

They are from 2007, they may be older than they are reporting. Maybe the DOLA isn't reporting correctly...whatever floats your boat.

 

Or should I send a DV to the CA's first? Isn't this what's called for in the JackAttack or 1-2 punch methods I have been reading about the last couple days (CA DV first, then dispute with CRA)? Me personally, I would dispute them first with the CRA's, just to see if anything is deleted first.

Worst case scenario, they won't be, and then you send a DV to the CA's.

 

 

 

Is there anything else that I can do to start building more credit quickly? Being an AU is not an option for me... Other than that? And yes, I will be saving, paying the cc's on time in full, and nothing else to collections! Go to the bank where you have your accounts. Take out a secured loan. Meaning, if your have $5,000 in an account (CD, Savings, Checking) that you don't need to touch, ask the bank for a secured loan in that amount. When you get it, put that money in a savings account. When the payment is due, go to that savings account to get the money to pay it. A local credit union will also do this. Just make sure whomever you go through reports to all 3 CRA's. *Very Important*

 

Also after these tiny collections are either deleted or fall off of your credit reports, try to get another one or two credit cards, and not from Capital One. They are handing you toy limits.

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