I had 3 charge-offs on my credit report: (1) Capital-One–$5,200 (2) Macys–$1,300 and (3) Dell Financial Services–$4,200.
I used a settlement company to pay these off (at about 50% rate, plus 35% of the savings to the debt settlement company).
I have ~ 10 derogs reported on my credit report from a student loan lender who marked that I was 60 days late. This is bogus but all I have is notes (and an affidavit I’ll put together) stating I called the lender and was given a forebearance (b/c I was in the process of consolidating all my student loans under a governemt program).
My question is, where do I go now? I’d like to increase my credit score. I’ve paid off all my credit cards (only have one, 10 years of payments, all on time) and paid off my car (80 payments ontime). I have one debt, a student loan, for $100,000 that is set for repayment in June 2011 (at a reasonable amount of ~$450 per month).
What can I do about those 10 derogs. I DID receive an assurance from the student loan lender agent (over the phone) that they would not post a derog for these loans as long as the loans were successfully consolidated within a few months. What do you recommend? Will an affidavit be enough? What about a BBB complaint? I’ve also heard of “Good Will” letters requesting they delete based on good will. Lawsuit? FTC Complaint?
The reality is your only real routes on those student loan negative items are to dispute them or sue the lender. I would suggest you dispute those items with the individual credit bureaus and provide supporting documentation with your dispute why they are not correct. Of course if you have consolidated your loans and made at least 12 on-time payments, according to the servicer, the negative history should be removed automatically.
If the borrower of a loan made under this part who has defaulted on the loan makes 12 on time, consecutive, monthly payments of amounts owed on the loan, as determined by the institution, or by the Secretary in the case of a loan held by the Secretary, the loan shall be considered rehabilitated, and the institution that made that loan (or the Secretary, in the case of a loan held by the Secretary) shall request that any credit bureau organization or credit reporting agency to which the default was reported remove the default from the borrower’s credit history. – Source
It sounds like with the negative history you have from settling your debts and the lack of use of credit now, your credit will improve only slowly. If you want to improve your score quickly you need new credit to score on and time to pass for the negative events.
If there is not enough new good credit then there is nothing to bring your “grade” up. Think about like you are in school. You can get a B from a C but you need an A to do it.
Here is a guide I wrote for people to rebuild their credit after bankruptcy but the same process applies to post-debt settlement as well.
Please post your responses and follow-up messages to me on this in the comments section below.