July 1, 2013 at 8:58 am #3352
Hey everybody. A little about myself, I am Valerie and I live in Ohio. I am 28 years old. I have had a couple of credit cards (store cards) over the years, all of which got sent to collections, one of them got stolen and the company didn’t cancel the card after I called and told them about it. The other was a Furniture Fair card, which I thought was paid off (purchased a mattress/boxspring/cover towards the end of 2009). I made a payment, and had to move from my apartment, I sent my new address to everybody. I never heard anything back from Furniture Fair for over 2 years (in mid 2011), then one day I received a bill and phone call from a debt collector about it saying I owned them over $500 (which was what I PAID for the mattress and everything as a whole). I explained the situation and how I thought it was paid off, especially as it had been so long since I had heard anything (no bills, calls, anything). So, needless to say both of those went to collections. I paid them both as soon as I found out about them. The Furniture Fair one was paid in full and the other store (who I won’t name) allowed me to pay 200$ of the 450$ bill because they couldn’t prove what was mine and what was the person that stole the card (as it had been about a year since I called them). Both of those accounts are closed, but they left negative marks on my report. They have been paid off for over a year (both of them) but they are still showing up on my credit report and I do not know how to remove them. My FAKO scores are not bad/terrible. They are in in the mid 600’s for all three credit bureaus.
I was going to apply for the Capital One Newcomers card, but after reading the information decided that it wouldn’t be the right card for me because I am not new to America, as I was born and bred here. I went ahead and applied for the Secure Credit Card to “rebuild” by credit. I will not be using the card monthly mostly because I don’t shop monthly (groceries and everything are paid for with cash after they are bought as I split with other people). I buy most things on Amazon because I work on their mTurk website, which is how I make my money and I can turn some of that into Amazon cards, so I always found it easier (for me personally).
My long time goal is to be in the mid to upper 700s (or higher) within the next year or so. I would like to purchase a house or condo. I am saving most of my money now so I can have a sizable down payment (at least 25%) when I am ready. I figured if I raise my score, it would help with loans and interest rates, etc on those loans.
6/29/2013 – Applied and got approved instantly for Capital One Secured Card.
6/30/2013 – Sent in a deposit of $80.July 1, 2013 at 9:08 am #3353
I’m sorry, I do not know how to edit a post and I remember something I forgot. The said accounts above (credit cards) are still showing up on my credit report as ‘paid in full’ and ‘settled’. I do not know how to get them removed. My FAKO scores from CreditSesame and Quizzle are 671 and 667, respectively.July 1, 2013 at 4:23 pm #3354
Hi ValerieAnne, first of all welcome to the forums.
Right now there’s only one thing you can do to remove those paid collections from your reports, you need to send what they call “goodwill letters”.
The best thing to do when you have an unpaid collection on your credit report is to try to negotiate a “pay for delete”. That is, paying the debt in exchange of having the tradeline deleted from your report. Most collection agencies are willing to negotiate, and sometimes you can even negotiate to pay only a percentage of what you originally owed (as you were able to find out). Once you pay, there’s really not much you can do, except for sending a goodwill letter.
Paid or unpaid collections will stay on your report for 7 years (from the date the account first became past due). A goodwill letter is basically a letter asking for deletion of these items early off your credit reports as a gesture of goodwill.
You have a strong case. I would just send each of these collection agencies (check the names and addresses that appear on your report), telling them your story and asking them (kindly) to delete these collections. Keep sending letters until you get a response.
Here’s an example of a goodwill letter: http://credit.about.com/od/creditrepair/qt/Sample-Goodwill-Letter-To-Remove-Negative-Credit-Report-Information.htm
Regarding your Capital One card, you don’t need to use it all the time. You just need to make small charges every once in a while (say you can pay for gas or food, etc.), pay your bill on time and don’t max out your card. You just need to re-establish credit and make sure your accounts are in good standing. Getting another card eventually would help too. By the way, I love Amazon as well and have their store card, maybe consider applying for their store card at some point…
Rebuilding your credit takes time, so don’t get frustrated if it takes you longer than a year to reach your goal. You need to be patient.July 1, 2013 at 6:28 pm #3355
Hello and thank you for all the helpful information. I am thinking of purchasing a new mobile phone plan,as I currently do not have one, I have a cell-phone but no plan, so I can’t really leave the Wi-Fi area or my phone won’t work. I figured that would be a good 40$/month (or every other). Since those accounts are paid (either in full, or or the settlement amount) are them being negative hurting me as much as I think they are? I was always told by other people, even though they are negative because they show I paid as soon as contacted about them (after going into collections, first I knew of them) it isn’t as huge of a hurt as I’d think since they aren’t sitting there in collections still – I paid the Furniture Fair balance within 2 weeks of finding out that it was still open by the collections person.
My goal is my 30th birthday, which is just over a year away, but I’m not going to be stressed on if it takes longer than that. Does the Amazon Card report to all three bureaus? I was under the idea that it didn’t. As you can tell, I never really thought much about my credit or anything since I like cash and always have the idea on if I don’t have the cash for it, I don’t need it. Clearly, that idea didn’t work as well as I’d hope in the long run lolJuly 1, 2013 at 10:14 pm #3356
Yeah, the cellphone plan will do. You just need to show some usage to establish credit history.
How old are your collections? The older the collection, the less it hurts your score. Unfortunately, for credit scoring purposes unpaid and paid collections are equally negative. That’s why it’s very important to try to get them deleted. Specially if you are looking to apply for a home loan.
In the eyes of a lender, a paid collection is much better than an unpaid collection. When asking for a personal or home loan, a lender looking at your credit report will prefer paid over unpaid debt, so I think it’s always a good thing to pay your debts. Of course, a lender will prefer not to see collections at all on your report.
When you’re applying for a credit card (or even a car loan), these are usually automated applications. A computer pulling your report and making a decision based on certain requirements. Some banks will deny you (in less than 60 seconds) if you have a collection on your reports (paid or unpaid). But as I mentioned before, the older the collection, the less it hurts your score. A 4 year old collection will not hurt you as bad as a 6 month old collection.
The Amazon store card does report to the three bureaus (it reports as a store credit card). It’s offered by GE, which is known to be generous with credit line increases (that’s something I can’t say about Capital One). The GE store card is also easier to get than the other Amazon credit card offered by Chase.
I like your way of thinking. You should only spend what you can afford to pay. I would rather not worry about credit at all and use cash for almost everything. However if you want to buy a car, a home or something that requires big money, you got to start playing the credit game.
Use credit to your advantage, don’t go crazy with it ’cause it can get you into a lot of trouble. A lot of people become addicted to credit cards, they like being approved for stuff and have 10, 15, 25 cards. I don’t see the benefit.July 1, 2013 at 10:32 pm #3357
Even the cards that went to collections were $500 and under – the CL was about 1000$ or so per card – and the only reasons they were so high was because of collections as I normally always paid them in full every month (there were a couple months that I’d only pay the minimum) but I couldn’t get around not having them as I had just moved and needed a bed and such..
Oo thanks! I’ll look into the Amazon GE card. Is this the card – http://www.amazon.com/storecard? Since I just got approved for the CapOne Secure I think I’ll wait a bit (a couple months at least) before I apply for another card. I like the phone bill idea as it would be a pre-pay (through PTel) so I could skip a month if I wanted and not get a minute card, plus everything is unlimited. So works well for me I think.
So even though they are showed as paid, I should still try to get them removed from my account. I paid the Furniture Fair one in 2011 and the other store card in March 2012 (first heard from collections after 2 years in February of 2012). I don’t know how long each was in collections before that though. I agree, I don’t understand the fascination with credit cards, I understand store cards more so as chances are you shop at those specific stores, and you may get benefits you like with them. I see people on myFICO forums and other credit forums where they have 5-20 cards and are always so happy and excited to apply for more lolJuly 1, 2013 at 11:36 pm #3358
Yes, that’s the Amazon store card. It’s actually more like a line of credit, because all they send you is a paper card with your account number on it.
Yes, even though they are showing as paid you should try to get them deleted. You’ll be surprised how much your credit score will change after they are gone. Start sending those goodwill letters!
Check out this article about paid and unpaid debts: http://www.credit.com/credit_information/debt_help/Pay-for-Removal-Deals-Removing-Collection-Accounts-from-Your-Credit-Reports.jsp
Also, you can get your free annual credit report from: https://www.annualcreditreport.com/ (this is THE official website). They don’t give you a score, just the reports (though I think they give you the option to buy the score if you want). Find out how old those collections are. Try to find out what your FICO score is. FAKO and FICO can vary quite a bit sometimes.
With a 670 score you could probably get other unsecured cards, like the GE Amazon card I believe. It’s always wise to wait a few months between applications, specially if you don’t have other credit cards right now. Let your CapOne report, this by itself might raise your score if you don’t have other cards reporting. Give them 30-60 days to report your new card to the bureaus.
Some crazy people at the myFico forums for sure! Haha. I guess some people like collecting plastic.July 2, 2013 at 12:42 am #3359
Thank you for all that info, I checked my FICO score a couple years ago and it was just above 600 I believe (I wanna say 602) but that was 2 years ago before all these collections and such. I am going to write my Goodwill Letters this week and post them next week. Should I send the message to the companies or the collection companies that I paid?
Update on my CapOne Secure Card: They still haven’t taken my deposit out of my bank account, at least it isn’t showing on my side. I’m assuming everything is going to be a bit slower because of the holiday coming up. My limit on my COS is going to be about 230$ which I think is perfect for me as it will only be used for that phone bill – if I decide to get it – and a few bits and bobs that may come up on Amazon.July 2, 2013 at 1:17 am #3360
You need to send those letters to whoever is reporting the collections as paid. Your credit report should provide the names and addresses.
Patience with Capital One. It always takes a little longer than you expect.July 2, 2013 at 9:49 am #3361
OK, thank you.
Update: 7/2/2013 $80 security deposit was taken out of my bank account by Capital One 🙂July 2, 2013 at 12:50 pm #3362
I just joined/signed up for CreditKarma. I know it is also a FAKO score but it does Transunion (where I think Quizzle and CreditSesame do the other two). These are my scores according to CK’s FAKO System:
Credit Score: 625
Auto Insurance Score: 827
Home Insurance Score: 779
I have “A”s in the following categories: Credit Card Utilization, Payment History, Age Of Credit History (I have a joint BestBuy Card that I forgot about as I haven’t used it since I was 17).
I received an “F” in Total Accounts because it shows I have 3 of them, 1 open and 2 closed (the ones that went into collections).
I received a “B” in the following categories: Credit Inquiries and Derogatory Marks.
Now, I don’t know what all that means, lol, but even though it’s a FAKO score, I’m gonna say it’s not as bad as I thought. lolJuly 2, 2013 at 10:18 pm #3363
That Best Buy card is definitely helping I think.
Are you going to sign up for CreditInform as well? Comes free with your CapOne card.July 2, 2013 at 10:34 pm #3364
Yes, I think it is as well. I will be joining CreditInform when my card arrives.. hopefully I get the e-mail by the end of the week about them shipping my card to me 🙂July 3, 2013 at 10:23 am #3365
Woah, just checked my score on CS and it dropped 33 points after applying for the Cap One Secured Card! :< It is now 635.July 3, 2013 at 10:27 pm #3366
I forgot to mention that a couple days ago I opt’d out to get all old addresses removed. After filling in the short online form and sending it off, I realized that all my accounts (minus the CapOne Secure Card) are linked with one of the old accounts (including the BestBuy one). I’ve heard removing old addresses also removes all the reports/accounts associated with it. Because I just removed/found out about the BestBuy one, will this stop the other person from using the card? I don’t have access to the card at all (I haven’t used it since 2006/7 when I purchased my laptop and that was all I personally used it for). The other person on the account IS using it though (not very often) but they are. There is a balance on it now (apparently they have been paying it for a couple months by the looks of CreditKarma) so the bills are coming to the new house.. so how will Opt Out effect that/them?
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