The good news is that my credit situation has drastically improved, and I have paid all of the account to zero balance except for one.  This same creditor (it was a credit union) has three accounts listed on my report.  I had two accounts with them – an auto loan and a credit line.  I’m not sure why the three accounts, but the one that shows a balance doesn’t even have an account number.  The balance is around $3500.  I should also note the date of last activity was July, 2006.

My question is what is the best advice on how to handle this account that would best affect my score quickly?  They haven’t tried to collect on this in over 4 years.  It doesn’t seem likely that they would start now.  But the balance of the account makes my revolving credit ratio appear to be 100% because all of my other accounts are zero balance and closed.  I have read about pay for delete letters.  Is that possible in this case?  If so, how much should I offer them for settlement?  Are there any better solutions?

As it stands, my credit score is 609.  I’m looking to purchase a house as soon as possible.  I need at least a 620 to get there.  Any thoughts on how long it would take to raise my score to 620?

John

—————

John,

When is the most recent date of last activity, or DLA of the ten derogatory accounts that you have?

The negative item you still have showing you state has a DLA of July 2006 but you should know that by so paying it today would drop your score considerably as your DLA will now be April 2010.

You may want to see if you are even still required by law to pay the original debt which may assist you with attaining a “pay for delete” scenario (but I doubt it).  A link to the statute of limitations on a state by state basis can be found here.  

http://activerain.com/blogsview/377048/chart-for-statute-of-limitations-debts 

In regards to the derogatories that still remain and have at least six months since the DLA I would recommend disputing the negative items on your own (after careful research on the pertaining laws) or hiring a credit repair company to handle the credit repair dispute on your behalf.  In the honor of shameless self-promotion I would be glad to offer you enrollment into our services her at HTDI Financial Consumer Division.

I hope this helps and please contact me if you have any questions.

Very respectfully,

Brian C. Aber

Vice President of Marketing
HTDI Financial
877-877-4834 x704

Charter Board Member
National Association of Credit Services Organizations
866-976-2276

he sublease [without having him sign any papers] his apartment to a friend who moved out oweing rent. I had nothing to do with that. wh and how can they go after me?

Curry

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Curry,

If you are a co-signer or this is considered a joint account then they would have the ability to come to you for financial restitution.  If not, then they have no right to submit a derogatory account from someone else onto your record.  If you never agreed to be a party to that I would recommend either handling the disputing yourself (Broken Credit has excellent articles for research) or I would recommend hiring a NACSO certified credit repair company to handle your credit repair process.  

In regards to your husband not having any score whatsoever, I would recommend attaining a secure credit card for him.   Please make sure to keep your payments on time and to make sure the balance does not exceed 25-30% as revolving balance is 30% of your score.

If you would like to utilize our services I would be glad to extend you a discounted rate to assist you in getting started.

I hope this helps, 

Brian C. Aber
HTDI Financial
National Association of Credit Services Organizations
877-877-4834 x704

I wanted to send you a quick note about your blog, Broken Credit.  It’s a great site and I can tell you work hard to produce high quality content.  I’m actually building up a credit repair site and I’m actively looking for other sites to buy.  Would you ever consider selling Broken Credit?  I think it would be a great platform for us and I can make a fair offer.  Let me know what you think.  Thanks!

Brandon

Jason

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Jason,

I’m actually surprised it went up and didn’t drop about a hundred points instead.  When you pay off older collections it renews the Date of Last Activity (DLA) and destroys the credit score. 

i.e. If you pay off a collection from 2004 today, it will appear and effect the credit score as a collection from DEC 2009.   If your score actually went up then I would say you are very lucky. 

I’m sorry I don’t have better news for you,

Brian C. Aber
Senior Account Executive – HTDI Financial Charter Board Member – National Association of Credit Services Organizations
877-877-4834 x704

Nobody is going to buy the property because the house is no longer worth the lein values.  If someone bought it, they would have to accept both leins. 

How can I get the bank to release the lein so I can sell the house to pay off the tax lein?  Is it legal for me to offer the bank some money to release the lein. 

Maybe I can just buy the house from the bank for a cash amount.  I am the only one willing to buy it with the IRS lein on it.  Will the IRS sit there forever holding that lein? 

Thanks.  I feel stuck in limbo.  I want to get on with my life.

Mel

———–

Hello Mel,

I answered your question earlier this month.

Read: IRS Tax Liens & Foreclosure

Thanks for the questions and hope this helps.

Paul

We put it up for sale right away, hoping that we could break even, and nothing. We kept up on the motgage for awhile, to the detrimate of our other obligations, but we could only keep it up for so long. We tried renegotiating our loan, but again…dead end.

We foreclosed on our home in Feb 08 (according to lender 2/12/08 was when forecloser was completed, and county record show transfer of title on loan happening at auction, 2/13/08).  We had a first and second mortgage.  We were defeated and tired. 

We moved and have started to rebound from the process.  We did a little reseach a few months prior to the foreclosure and found out that the home sold for more than we owed on the 1st and that the 2nd had “charged off” on our credit.  We called to find out how to help our credit due to the charge off and were told that we could settle for more money than we had available to us, or basically do nothing.  They (the mortgage lender) said that they would never persue the debt, but that it would stay on our credit. 

We just found out that we qualify for a VA Loan and that there wait after foreclosure is shorter than a conventional or FHA (2 years vs 3 years).  Excited and ready to move on, we started to check proir to the “timeline’, just to make sure we would be able to purchase another home.  So…found out that the “2 year” wait starts the day the foreclosure hits your credit, same with the the 2nd mortgage charge off. It is only 3 month shy of the “2 year” mark for us. But during my checking process I found out that up to 8 months after the foreclosure was reported my mortgage company continued to report me as late??? Can they do that?

They said that the sale wasn’t finalized until 10/08. But again, according to county records the title transfered from us to the buyer on 2/13/08.  Also, the second is continuing every month to report a charge off on my credit up to now!!  How can they do this? 

I understand that it is considered a debt that is still outstanding and that they have deemed it uncollectable, but how can they continue to “re-new” that debt? Is this legal? If I am trying to rebuild me and my families life after foreclosure, how am I to do that if the lender can continue to report me like it just happened?

I did contact the leaner,who by the way is the same for both mortgages and where originated at the same time, said that the 1st credit reporting months later was because of the sale not being complete until 8 months later.  And the 2nd, because we still “owe” the debt they can continue to report it.

I am so tired, please let me know what to do?  Fight…give up??

Defeated,
Gary and Jeni

——————–

Hello Gary & Jeni,

It sounds like the property taxes were estimated based on land value only and then at closing they escrowed taxes based on the improved value.  Also, if the property was in Alabama, Iowa, Kansas, Michigan, or Minnesota, then there was a six month or longer redemption period post-foreclosure.  The second is not able to renew the debt for reporting obsolescence but they can continue to report the debt (each month) to the credit bureau until that date. 

You should give Brian Aber a call at HTDI to see what he can do for you.  Brian’s number is 877-877-4834 x704.  Tell him the Broken Credit Blog sent you.

Thanks for the questions and hope this helps.

Paul

I have about six more collections accounts to pay off. They all total about $2229.00. The one account that I have in good standing is an auto loan that I am currently still paying on because when the car was totaled I was upside down. That amount is $3973.00.

Where do I begin? What do I do first. I will have the auto loan paid off by 12/18/2009. Do you think that I will be able to get approved for a decent loan by January if I pay off the current loan and pay off all the other accounts? The problem that I am facing now is that places will finance me on used cars with high mileage for unreasonable prices at 24% APR. Please help me. I am lost.

Thank You,
Crystal

—————-

Crystal,

Unfortunately the way the system works is that when you pay off your old collection accounts it will renew the “date of last activity” and destroy your score.  If you pay off a collection from 2004, it will damage your score with the same level of intensity as a brand new collection. Extremely counterintuitive, but it is the policy nonetheless.

Please note I am not informing you to not pay bills that you owe on, but simply letting you know what will happen to your credit score when you pay off outdated derogatory accounts.  Personally, I find the fact that you are repaying your debt and not taking the easy way out is admirable and deserves consideration.

I apologize for not having better news for you, but if you have any further questions or would like assistance with your credit repair process I would be glad to help.

Brian C. Aber
Senior Account Executive – HTDI Financial Charter Board Member – National Association of Credit Services Organizations
877-877-4834 x704

Thankyou you have been a great help. I have sent letters to the bureaus about inaccurate information. They keep verifying what wording can I use to make they delete my inaccuracies? Please advise thankyou!!

Diane

———-

Diane,

I’m assuming from what you’ve wrote that you have received correspondence from the credit bureaus verifying the negative items you disputed. 

As for your request for the wording to sue to make them delete the derogatories … I wish I knew.  It all comes down to whether or not the negative items are meeting the criteria outlined in the Fair Credit Reporting Act for them to be continuously reported.  If your negative item is inaccurate and/or unverifiable then you will want to research the particular laws and reference them in your dispute.

I hope this helps,

Brian C. Aber
877-877-4834 x704

thankyou!!

Diane

———

Hi Diane,

It is possible if it is an account such as a phone bill, or utility bill, or close bank account with a negative balance.  If they weren’t reporting your payments on time every month then they shouldn’t be reporting you as late either.  They are typically geared towards installment account or accounts with revolving balances.

I would recommend you write an effective dispute letter to the bureaus reporting this derogatory and state how it is inaccurate, unverifiable, and I would also recommend stating the particular laws that address your situation, or hire a reputable credit repair company (like mine).

I hope this helps,

Brian C. Aber
Senior Account Executive – HTDI Financial
Charter Board Member – National Association of Credit Services Organizations
brian@htdifinancial.com
877-877-4834 x704

My question is 2 1/2 yrs ago my jeep Cherokee was reposessed because I was in jail for a few months. My original loan was through wells Fargo and has been sold to arrow acceptance. I am wanting to by a house now and my fico median is around 680. 

The loan has been turned over to a law firm who says nothing will be reported on my credit until it is paid in full. They threatned to sue me but I am a merchant mariner and it is impossible to place a garnishment or attatchment against my wages according to u.s.c. 46 part 11109. I told them this about a year ago and they have not responded back.

My real question is should I use a dept settlement company to pay them off or should I just say screw them. My credit has already taken the hit for the repo but I don’t know if a settlement would further hurt my score.

The owed balance is $10500 they said they would settle with me for $8500. I think this is hi being that they in no way can garnish my wages what amount should I be looking g to settle at? 

Thanks for any help or advice.

Taylor the towboater

———————-

Hello Taylor,

Wage garnishment is only one means by which collection on a judgment can be pursued.  A judgment – if it gets to that stage – can also lead to garnishment of bank funds or attachment to any other asset owned.

I’d guess that balance could be settled for half of what was offered, but bear in mind that from a credit reporting standpoint – if the law office is collecting and nothing is on the credit save the original tradeline which shows a $10,500 balance, then settling this 2.5 year old account without a pay for delete will probably reduce the credit score.

Read: Dana’s Story

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.