It makes them unhappy, huh?
I’ve had OCs do that for me quite a few times, although… are you in student loans?
Never had one of those.
How much leverage do CAs have, anyway?
It seems like if you tick one off badly enough for it to quit, another dozen would be happy to take your account.
Yes, I do programming for the student loan collections department but am not actually part of the loan collections department. That’s just what the supervisor of the loan collections department told me, that the CA isn’t happy when a debt is recalled. I don’t know why. Maybe it’s a lot of paperwork or something. Anyway, for some reason, it’s rarely done.
ETA: We only work with a certain few CA’s. I assume they are the ones that the loan collection department felt had a better reputation. We have dropped some before and added others. I would assume there is some kind of contract involved.
I’m surprised (and disapointed) to hear that going to credit counseling hoses your credit score. Shouldn’t it raise it? You’re getting professional help to aid in your repayments and gaining important wisdom in money management. I would think that this would be a great thing to creditors. It’s like going to college and having employers want to pay you less.
phreesh,
Most people that enter these programs fail to complete them.
The analogy isn’t going to college and making less money; the analogy is closer to quitting your job and going to a college where most students will not graduate.
The fact that the original AND the collections-agency versions of the debts are being reported is of great concern. You definitely need to challenge those to get one or the other removed. Demand proof (from each) that you legally owe the debts; one or the other should get removed.
I’d definitely check with the credit card issuers first, to find out what their records say, and if they say “sold to agency, not our problem” then demand that they remove it from your credit report (do so in writing. Do EVERYTHING in writing).
Once one or the other of the duplicates is removed, that in and of itself should help your score a little bit, by dint of reducing the number of delinquent accounts shown.
Taxable income from reduced balances: Yes, I’ve heard this. I don’t know if this would be true if you got them to waive things like interest / penalties, since you’re just getting them to write off what they slapped on top - you didn’t benefit from those in any way.
Watch the credit report assiduously for a while, I’ve heard horror stories of collections agencies selling and reselling bad debt and continuing to report it as current debt for years, long after it had been paid down or otherwise rendered unreportable.
Do your best to get rid of the penalties but then pay down the original amounts quickly - the further in the past the bad amounts are, the less impact they’ll have on your score over time.
If you have any other credit accounts, make sure to keep them current so you have “pays as expected” on at least one account. Consider a secured card, if you can’t get one any other way (but avoid the predatory cards that carry insane fees).
Look around on creditboards.com - there’s probably a LOT of good information there.
Can I get a cite on it not being legit for both an OC and a CA to report a bad debt?
And they still might not write the loan: after all, if you’re in default on other stuff but still have this pile of cash, how do they know you’ll pay them?
If you’re still referencing the OP, which I’m not sure if you are, he’s only $1500 in the hole, so we can be pretty sure that if he has 20% down on any worthwhile home in the continental US he can knock it out.
Ah, I see.
I guess in an ideal world, there would be some sort of identifier of those who are in credit counseling and those who have successfully completed it. Doesn’t do much for those in the program who are taking it seriously, but that’s life I guess.
No - it was more of a hypothetical “you” - obviously if the OP had the 20% down he could pay down the 1500, but he’d still want to get the credit sorted out as much as possible. A bank might see that he had, say, 40,000 bucks saved for a 200,000 house, but then also see a currently-delinquent loan, and decide that didn’t look like a good risk.
They might like the picture better if the OP had the 40,000, and a loan that was shown as delinquent last month but paid-in-full this month. They still might ask a LOT of questions and demand a lot of extra documentation.
IIRC, I think when you complete the credit counseling successfully, the note just gets removed period.
Been maybe 5 years since I did any reading about that, though.
For the record, I asked the guys here:
if they show up on your report as “In credit counseling” and they don’t.
The first step is to pay off the debts. As mentioned earlier, time is then on your side… Then save the necessary down payment. Show yourself you can afford regular payments (into a savings account), before asking the bank to. I suspect the interest rate will be lower if they are not risking 100% of the cost of the house.
This is flat out wrong and won’t get you very far. The original creditor is reporting it as a Status 93 - Account seriously past due and/or assigned to internal or external collections. The collection agency is now the one in charge of collecting the debt (and they should also be reporting it as a status 93 until it is paid (Status 62 - Paid in Full, was a collection account) or returned to the original creditor). It is completely correct and normal for it to show up in both places. The fact that both are reporting the debt as still owed also indicates the debt wasn’t sold to the CA, it was assigned. If the debt had been sold , the original account would have been reported as one of the closed statuses (probably as a charge off).
I concur. I just emerged from credit counseling in 2010. At the time, my FICO was around 740.
Then again, this was a very reputable firm (Consumer Credit Counseling of Maryland). I don’t know if this would apply to some of the other groups.
Also, I’ll reiterate, just because an account is closed (paid, charged-off, nuked from orbit) does not mean it drops from your credit report.
Question for the OP that may clear some of the confusion up: What exactly does your report say for the statuses of the two accounts?