ItsANewDay

A couple questions to start my long road!

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 Going to start this process and track it throughout as I am completely ready to correct years of poor choices, poor luck, and obviously poor credit. Have read extensivley for about a week now and I have a couple of questions that I can not seem to find the answer to.

1) I see that if you order your reports from freeannualreports.com  that the agencies have 45 days instead of 30 to respond to disputes. What I can not seem to find is if that 45 days is only for online disputes or if it is also for certified letters that are mailed in? 

2) Is an account that is closed by the creditor that you have had for years beneficial to you at all? In other words should one make minimum payments on it and drag it out so the long history of credit helps, or might as well pay it off an move on because once closed you have lost the benefits and are being hurt by the debt remaining on it.

3) When getting secured Credit Cards to begin the rebuild process, how many should you get? 1, a few, as many as you can?

 

Thanks guys, looking forward to this process and bringing an end to this era of my life!

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4 hours ago, ItsANewDay said:

1) I see that if you order your reports from freeannualreports.com  that the agencies have 45 days instead of 30 to respond to disputes. What I can not seem to find is if that 45 days is only for online disputes or if it is also for certified letters that are mailed in? 

The 45 vs. 30 is based only on the report you are disputing from.  If you pay for your reports, they have 30 days to respond.  If your plan is to catch them violating, you're greatest advantage in relation to the window of time they have to respond is to make that window as small as possible.  Pay for your reports to accomplish this.

4 hours ago, ItsANewDay said:

2) Is an account that is closed by the creditor that you have had for years beneficial to you at all? In other words should one make minimum payments on it and drag it out so the long history of credit helps, or might as well pay it off an move on because once closed you have lost the benefits and are being hurt by the debt remaining on it.

One of the most heavily weighted factors of your credit report is credit history, or "age".  If you can control how long an account stays on your report, do that, but not to your detriment.  In other words, don't keep high balances just to prolong the pay-off.  High balances are also weighted very heavily.  7-10% utilization seems to be the magic window in terms of credit score.  If you pay below that, your score drops because it doesn't demonstrate that you know how to use credit.  If you go over that, you are viewed as a greater risk of default.  So  if you want to prolong an account (I'm assuming were talking about an installment account), pay more initially if you want, but then when you get down to 20% or so, start paying the minimum.   Note that a 'closed' account that reports is still factored into your overall age.  It's not until the account is closed for 10 years and drops off your reports that the age benefit of the account goes away.

5 hours ago, ItsANewDay said:

3) When getting secured Credit Cards to begin the rebuild process, how many should you get? 1, a few, as many as you can?

I'd get 3.  Too many new accounts looks bad, and even 3 will tank your score for a while, but it will recover within a year or so.  Maybe spread the opening of them out over a year.  Again, use them and carry a balance if you want, but when you want more credit, pay them down to just under 10% and your score will rise accordingly.

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9 hours ago, Harry Seaward said:

The 45 vs. 30 is based only on the report you are disputing from.  If you pay for your reports, they have 30 days to respond.  If your plan is to catch them violating, you're greatest advantage in relation to the window of time they have to respond is to make that window as small as possible.  Pay for your reports to accomplish this.

One of the most heavily weighted factors of your credit report is credit history, or "age".  If you can control how long an account stays on your report, do that, but not to your detriment.  In other words, don't keep high balances just to prolong the pay-off.  High balances are also weighted very heavily.  7-10% utilization seems to be the magic window in terms of credit score.  If you pay below that, your score drops because it doesn't demonstrate that you know how to use credit.  If you go over that, you are viewed as a greater risk of default.  So  if you want to prolong an account (I'm assuming were talking about an installment account), pay more initially if you want, but then when you get down to 20% or so, start paying the minimum.   Note that a 'closed' account that reports is still factored into your overall age.  It's not until the account is closed for 10 years and drops off your reports that the age benefit of the account goes away.

I'd get 3.  Too many new accounts looks bad, and even 3 will tank your score for a while, but it will recover within a year or so.  Maybe spread the opening of them out over a year.  Again, use them and carry a balance if you want, but when you want more credit, pay them down to just under 10% and your score will rise accordingly.

Thanks Harry Seaward!

So if I am understanding you correctly since the last report I got from transunion was from freeannualcreditreport any dispute I make will give them 45 days to repsond. If I go ahead and purchase a report from transunion they will only have 30. Is this correct?

No the debt closed by the creditor was a credit card, not an installment. I am just not sure if completely paying it off will hurt me since I have had it for many years, but I am also unsure if those many years even matter once it is closed by the creditor. 

It is fine if getting three hurts my credit in the short term. I am resigned to the fact that this is not going to be a quick fix, so I am good with it if it helps me in the end.

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3 hours ago, ItsANewDay said:

So if I am understanding you correctly since the last report I got from transunion was from freeannualcreditreport any dispute I make will give them 45 days to repsond. If I go ahead and purchase a report from transunion they will only have 30. Is this correct?

That's correct.  Even if you have already obtained the free ones, you can purchase one and use that one as the basis for your dispute, giving them only 30 days to respond.  It's been a while, but when you dispute one of them (or maybe all three) online, they will ask for a 'report #'.  You would use the number from the paid report and not from the free report.

3 hours ago, ItsANewDay said:

No the debt closed by the creditor was a credit card, not an installment. I am just not sure if completely paying it off will hurt me since I have had it for many years, but I am also unsure if those many years even matter once it is closed by the creditor. 

The age will count toward your overall score, open or closed.  If it's closed, it will fall off 10 years after it was closed, but the age of the account will continue to be calculated into the average age of all accounts until that time.

 

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Yeah, I agree with Harry. You will want to purchase your credit report so you won't have to wait half an extra month for replies. And I would get a couple cards to start establishing credit. Capital One is really good at approving people after bk's or people who had their credit damaged. I got approved in under a year for an unsecured card after my bk.  Hope that helps!

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