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situation with amex and credit repair


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This morning out of the blue, Amex sent me an email stating that my account was cancelled by them.  After having been an Amex customer for a good 15 years, I'm surprised that they would just suddenly cancel my account.


I called them directly and I was told that they have reviewed my FICO score and as of this month, my debt to income ratio is too high and that therefore I pose a risk. 


Here is where I have a problem:  


First of all, I have not had a credit card (besides AMEX) in the last 5 years.  I do, however, have "bad credit", but it is old bad credit.  Nothing that Amex wouldn't have noticed, say a good two years ago.


I used to have about a good 4 credit cards, but was the victim of a financial "perfect storm" - meaning that during the great recession, when my credit score was a good 790, my husband left me without warning, to live with another woman.


I was left to pay a Manhattan rent, student loans, and revolving credit card balances - all under my name.   I had lost my husband's income and was scraping by (even starving at times) to pay all of the debt on time - which included my legal fees for my divorce, which lasted for three years.    


It was during this exact point that *all* of my creditors suddenly decided to increase my interest rates from 4.9% to an exaggerated 29.99% for no other reason other than, "we are in a recession and all banks are doing this."  I tried to beg them to decrease the interest rate but to no avail.  They point blank told me - especially Citibank, that  in order for me to be considered for any type of "relief", that I would have to default and show that I cannot pay my the loans.  I told them that I didn't want to ruin my perfect score of almost 800, but they really couldn't have cared less.


Anyway, I tried to pay them off, but I couldn't.  I just wasn't making enough money, so I defaulted on all of them.  I was so resented that I never looked back in paying them.


Eventually, I was sold to "Midland Funding", whom I had successfully fought off.  



Fast forward to today and Amex's phone call, and I need help.  I am a bit pained that Amex has cancelled my account because of a declining FICO score.  I am not even sure why it had declined.  I have not used any credit cards since my husband's departure in 2006 except for Amex, which I paid off every single month.


Second, I had written the credit agencies to remove the derogatory Midland Funding cases (there were several) from my credit report, and they have been deleted.   I don't see why debt should be shown twice - one with the banks and the other with the collection agency.


But the real questions are:  


How can I fix my credit?  I do not want to start paying old debts from 2006- 2009, for fear of reinstating the SOL.  Second, these derogatory incidents  on my credit report - all which took place in 2008-2009 are to be deleted from my credit report very soon.  Does it make sense for me to even attempt to pay them?  How else can I fix this declining FICO score?  If I do not have any credit at all, except for my debit card, how can I establish credit all over again??


Help!  ::drowning::


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So sorry about your trouble with AmEx.


Personally, I would not start paying debts that are outside the SOL.  The older entries are going to to fall off on their own in a year or two.  But you can dispute them.   Who knows?  The furnishers may not bother verifying them, and they'll have to be deleted.


The reason the OC and a collection agency can both report an account is because our CRs are our credit history.   A collection account is part of that history.


In regard to establishing credit, you might try applying for a store card.  If you're not approved, try a secured credit card.  My son once took out a small loan with a local bank, put the money in savings, and used it to pay off the loan. 

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