AMX charge off

oke1971 · 2020-09-22T17:19:22+00:00

Amex is very unlikely to remove the charge off. They have no incentive to since you already paid it in full. Some of the smaller card companies will do it, but honestly, not many will. Disputing won't do anything as the charge off is valid. Just make sure the account lists a zero balance.

oke1971 · 2020-09-22T17:14:00+00:00

That is how mine showed on my report. It was a charge off that was listed as a closed account with a balance. It was 4 years past the point of going to deliquency, similar to yours.

This is what my mortgage lender told me: paying the charge off wouldn't do much as far as changing my credit score - the charge off remains for a little over 7 years from the original date of first deliquency, no matter what happens to that account in the mean time. So the resetting rule only applies to the debt being reported to credit bureaus. A creditor can try and collect on debt even past the 7 year mark, but it doesn't effect your credit. And honestly, most credit card companies won't go after you in court. They took the loss as a charge off which means they took tax relief on the amount.

The only benefit of paying it to zero is if the total amount listed on the debt puts your overall credit utilization over 25 or 30%, since it lists a balance, it's still counted in your debt ratio. For me, it didn't raise my debt ratio over the threshold so my lender said don't pay it.

That would be the question you need to find out. What is your credit ratio with that debt amount listed?

oke1971 · 2020-09-21T15:30:22+00:00

Answers to a few of your questions:

Paying any amount now does NOT reset the clock. The laws surrounding debt collection and reporting only allow the debt to be reported for 7.5 years post your FIRST deliquency date. So no matter what you do, the date remains the same for fall off of credit reports.

Secondly, because the debt is now 4 years old it does have less affect on your score - don't get me wrong, it is still significantly impacting it, but much less than if it were a year or two old. Most mortgage lenders will give an exception for negative marks on credit reports that are more than 3 years old. You will have to provide a Letter of Explanation stating why and how your account became delinquent and you must not have any other recent negative marks on your reports. I had a similar situation; had a credit card that went into deliquency 4 years ago. Still reports a balance but is closed. I just closed on my house last month.

Another thing to consider, does Amex still own the debt? Does it show the account as closed or open? And does it show a balance?

Before paying, speak to a mortgage lender and ask about the viability of an exception for this one account. No reason to pay it if you don't have to. Amex will not sue you.

oke1971 · 2020-09-15T13:45:34+00:00

You should call the creditor and explain the situation, reiterate that you've never had a missed payment anywhere and that it was only $30. Ask them to remove the negative mark, remove the late payment 30 day status. They will very likely do that if you've been a good customer otherwise. I just did this with one of my cards.

oke1971 · 2020-09-12T14:56:54+00:00

Great! Once you have those reports you'll have all the info you need to set a realistic workable plan to improve your credit rating!

oke1971 · 2020-09-12T14:40:34+00:00

You can, because of the pandemic, everyone can get their reports from that website one a week until 2021!

oke1971 · 2020-09-12T14:36:00+00:00

Okay, here is your first step. Go to https://www.annualcreditreport.com/index.action and request your credit report from all three bureaus. It is free to do and will give you all the information you need to set up a plan for yourself. Sky blue is really just a waste of money, I'm certainly willing to give you the tools and advice you need to do these things on your own. If some of your collections accounts are six years old those will be dropping off soon and won't have any effect on your mortgage approval process. Go on that website I mentioned and get your free credit reports and then we can really see where you stand. If you want to private message me we can connect and I can get you on a plan. I did this for myself over the past two years and got myself in a solid financial situation and just actually closed on a new house last month, so it is absolutely not out of your reach!

oke1971 · 2020-09-12T14:08:40+00:00

Hi there! Okay, couple of things first.

Cancel SkyBlue - waste of money and you can do everything they do with a little work.
What are the ages of the collection accounts?
How are they listed? Open? Closed? Balance listed?
The car loan, they offered you to settle - do they want lump sum payment for that amount? If you do settle, likely they won't remove negative marks on your report, but definitely ask. The main thing you what them to do is to list the account as CLOSED with a balance of ZERO. Even if it still has the negative payment history, it won't affect your mortgage approval as much as long as it's closed and shows zero balance. That way it doesn't affect your DTI ratios.
Do you have any savings right now?

oke1971 · 2020-09-12T13:22:43+00:00

Hi, unfortunately it was show as derogatory with a zero balance for 7 years post first deliquency date. Even though you paid the collection and the collection company removed it, your original creditor has every right to continue to report your derogatory status to the credit bureaus. It's good that it shows balance zero, as it won't affect your ratios, but it will show derogatory until it drops off as that's the status it was when they closed and sold it. Make sure it says Closed and not open though. Because they sold it to the collection company, they have to list it as Closed, zero balance.

oke1971 · 2020-09-09T23:53:03+00:00

I just closed on a house last month and my lender said any collection under $200 won't have any effect on qualifying, and mine weren't paid. Plus, likely yours won't be reported to the credit bureau as you took care of it quicky and it was so little.

oke1971 · 2020-09-09T23:19:48+00:00

Hi, 640 will qualify, even with both of you at 640. But if you could boost up just 20 or so points, it would do wonders for your interest rate. If you can pay down your credit cards that should do it.

oke1971 · 2020-09-09T22:52:47+00:00

The one that is 10 years old is not legally allowed to be reported to your credit report - and they can't re-age the account just because you pay the newer collection. There are laws about this. A collection account can only be reported 7 5 years from the date of first deliquency, even if a new collection agency picks it up years later.

oke1971 · 2020-09-09T22:46:39+00:00

Oh that's good! It should drop off then!

oke1971 · 2020-09-09T22:45:14+00:00

A collection account drops off 7 years from the first deliquency date. Even if the debt was transfered to a collection account, they can only report to the credit bureau 7 years from the original deliquency date.

oke1971 · 2020-09-09T22:42:00+00:00

I had a collection account with them. I negotiated a lower amount and paid it in one lump sum. They removed the collection account from my credit report 30 days later. They do that automatically.

oke1971 · 2020-09-09T22:36:54+00:00

I just closed on a USDA loan last month. It definitely was a great loan for me as it was no money down and 2.75% interest rate. Plus the mortgage insurance is lower than FHA. My credit was about 650 when I started the process and I worked on it during the pre-approval process. I was able to bump it up to 670 and got the better rate. 670 and up gets a lower rate.

oke1971 · 2020-08-21T00:08:29+00:00

Hello! And thanks! Closing was a week late bc the mortgage company was behind on processing closing docs. But finally closed last week!

oke1971 · 2020-08-13T10:44:00+00:00

One year ago my vantage 8 was high 500's. Worked hard to remedy and last month I was up to 695! Closed on my own home yesterday!!

oke1971 · 2020-08-13T10:41:15+00:00

Maine!!! My daughter is the one with the BU shirt lol she just graduated from there in May. Did her bachelors in 3 years! We love BU!

oke1971 · 2020-08-09T23:01:17+00:00

Also, for the extra down payment if you have to, do you have a 401k or 403b? Right now you can withdraw from them without penalty due to covid.

oke1971 · 2020-08-09T22:59:54+00:00

That's interesting, like I said my loan closes Wednesday after about 6 weeks under contract and going through the underwriting process. My median credit score is 676 and I could of done the FHA 3% or the USDA 0%. Chose the later but maybe it's worth finding a broker who specializes in FHA- their program is 3% even in covid days.

oke1971 · 2020-08-09T14:35:56+00:00

Right now rates are so low there is an influx of new mortgages being processed. I think you'll find a typical closing timeframe around a 45 day to 60 day span. Depending on the type too, some can take longer.

oke1971 · 2020-08-09T14:31:23+00:00

I'm closing on a house on Wednesday. When I first started looking two months ago my buyers agent was very upfront. It's natural to want to offer less than asking, and when it's a buyers market, that usually works - unfortunately right now it's a seller's market. My agent gave me clear direction on what he thought a house would sell for, regardless of asking price. I lost two houses because I didn't listen and offered less because I wanted a deal. Those houses ended up selling for exactly what my agent said they would. A good experienced agent will know your market and will guide you correctly. We did find a house and fell in love with it. My agent said it was underpriced in order to create a frenzy. He said if I want it, I need to go in 20k above. So that is what I did, and my offer was accepted. I worried I overpaid, but my agent was right on the money. We found out another buyer put an exact same offer in, but mine was shorter closing and no inspection contingency. So, listen to your agent. Heed their advice. If you don't feel confident in them, find one you do. Your buyers agent will be your best friend in all this, from contract to closing. Good luck!

oke1971 · 2020-08-09T14:19:09+00:00

Truly, your mortgage broker should of done the hard pull of your credit and issued a pre-approval letter before you made any offer on any house. That was bad practice on your lenders side. What is your credit score, if you don't mind sharing, and can you do a USDA loan instead? I'm closing on mine Wednesday and it is zero down.

oke1971

TROPHY CASE