Poor Credit/Trying to grasp the process; what are my options

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Ty Webb
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Poor Credit/Trying to grasp the process; what are my options

Postby Ty Webb » Tue Jun 15, 2010 6:49 pm

Common story. I took out credit cards in college, ran up debt way over my head on a host of stupid things. paid them for a while, then when I missed a payment, my rates shot up to 30% or so. Monthly payments became pretty much undoable for me, so I have $5k or so in debt just sitting there.

It's been about 4 years since I quit trying to pay them down, and my credit report reflects nothing bad in close to 3 years. At this point, it's almost easier to just allow these things to fall of my report, rather than stirring them up with a settlement that would sit on there for 5 more years.

That said, this obviously disqualifies me from GradPlus loans on my own (or so I assume). There are 3 accounts charged off and a couple in collections. Pretty irresponsible times, certainly.

So what are my options? I'll need about $20-25k in GradPlus to make it work. My parents have relatively poor credit, but I don't think they have anything especially ugly from the past few years. Otherwise, I have a grandfather willing to cosign (good credit).

I guess the question is: would a grandfather with solid credit co-signing allow me to qualify, despite my credit score (which is around 600)?

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Tue Jun 15, 2010 8:33 pm

Ty Webb wrote:Common story. I took out credit cards in college, ran up debt way over my head on a host of stupid things. paid them for a while, then when I missed a payment, my rates shot up to 30% or so. Monthly payments became pretty much undoable for me, so I have $5k or so in debt just sitting there.

It's been about 4 years since I quit trying to pay them down, and my credit report reflects nothing bad in close to 3 years. At this point, it's almost easier to just allow these things to fall of my report, rather than stirring them up with a settlement that would sit on there for 5 more years.

That said, this obviously disqualifies me from GradPlus loans on my own (or so I assume). There are 3 accounts charged off and a couple in collections. Pretty irresponsible times, certainly.

So what are my options? I'll need about $20-25k in GradPlus to make it work. My parents have relatively poor credit, but I don't think they have anything especially ugly from the past few years. Otherwise, I have a grandfather willing to cosign (good credit).

I guess the question is: would a grandfather with solid credit co-signing allow me to qualify, despite my credit score (which is around 600)?


Have grandpa cosign. My credit is under 500 (I did what you did, but decided to finance a brand new car as well and defaulted/got it repossessed on...yeah, I'm a fucking idiot, I know this now), my dad cosigned today, and I'm golden. 27k in gradplus.

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HazelEyes
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby HazelEyes » Tue Jun 15, 2010 8:54 pm

Oh god, you guys are freaking me out. I need to process my finaid asap, so I can find out if I can get loans.

I seriously don't have a co-signer if GradPlus doesn't approve me.

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Tue Jun 15, 2010 9:05 pm

HazelEyes wrote:Oh god, you guys are freaking me out. I need to process my finaid asap, so I can find out if I can get loans.

I seriously don't have a co-signer if GradPlus doesn't approve me.


Chances are that you will be approved. I think we (me and OP) are probably on the rarer end of the spectrum.

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HazelEyes
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby HazelEyes » Tue Jun 15, 2010 9:07 pm

chicagolaw2013 wrote:
HazelEyes wrote:Oh god, you guys are freaking me out. I need to process my finaid asap, so I can find out if I can get loans.

I seriously don't have a co-signer if GradPlus doesn't approve me.


Chances are that you will be approved. I think we (me and OP) are probably on the rarer end of the spectrum.


No, I had an open collection that I was in the process of disputing.

In the end I just paid it (today) because I wanted to clear my record, but it will still reflect on my report.

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Tue Jun 15, 2010 9:10 pm

HazelEyes wrote:
chicagolaw2013 wrote:
HazelEyes wrote:Oh god, you guys are freaking me out. I need to process my finaid asap, so I can find out if I can get loans.

I seriously don't have a co-signer if GradPlus doesn't approve me.


Chances are that you will be approved. I think we (me and OP) are probably on the rarer end of the spectrum.


No, I had an open collection that I was in the process of disputing.

In the end I just paid it (today) because I wanted to clear my record, but it will still reflect on my report.


Call all credit reporting agencies (Experian etc.) and dispute the collection. If it's paid, it should be off in 30 days, as the creditor has 30 days to respond that the debt is valid/still open. Also call that creditor like a bill collector (pun intended) to try to get it removed on their end.

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Scallywaggums
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby Scallywaggums » Tue Jun 15, 2010 9:13 pm

I may be off, but I don't think a settlement will hurt your score.
I know that settling with a collection agency will show up on your report if said agency has already reported it to the credit bureau. But I believe that if this is the case, then while settling doesn't make the issue vanish, it will nevertheless increase your rating.

Someone who actually knows: please correct or confirm this.

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Tue Jun 15, 2010 9:18 pm

Scallywaggums wrote:I may be off, but I don't think a settlement will hurt your score.
I know that settling with a collection agency will show up on your report if said agency has already reported it to the credit bureau. But I believe that if this is the case, then while settling doesn't make the issue vanish, it will nevertheless increase your rating.

Someone who actually knows: please correct or confirm this.


You are correct.

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Scallywaggums
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby Scallywaggums » Tue Jun 15, 2010 9:22 pm

Thanks, ChicagoLaw... ok so

Ty Webb wrote:It's been about 4 years since I quit trying to pay them down, and my credit report reflects nothing bad in close to 3 years. At this point, it's almost easier to just allow these things to fall of my report, rather than stirring them up with a settlement that would sit on there for 5 more years.


Not true. If you can settle them out of collections, do so as soon as possible. Your credit report does not reset after 3 years and forget about the fact that you owe thousands of dollars.

Edit: unless you file for bankruptcy. You can't do that now, but I've heard that after a handful of years your credit rating becomes reasonable.

ScaredWorkedBored
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby ScaredWorkedBored » Wed Jun 16, 2010 10:02 am

Bankruptcy is a specific issue and automatic adverse credit in the GradPLUS screen anyway, looking back last five years.

AppsAbound
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby AppsAbound » Wed Jun 16, 2010 10:14 am

quote] Call all credit reporting agencies (Experian etc.) and dispute the collection. If it's paid, it should be off in 30 days, as the creditor has 30 days to respond that the debt is valid/still open. Also call that creditor like a bill collector (pun intended) to try to get it removed on their end.[/quote]

Not true, not true, not true!

Adverse accounts remain on your credit report approximately 7 years from the date of last payment, give or take 120 days for the account to be charged off.
Most debt collection agencies will not agree to remove the account after it's been paid. That is something that needs to be agreed to in writing as part of the settlement agreement.
And OP was write about stirring it up on her credit report. If she hadn't paid in 4 years, the accounts would have dropped off in 3 years. If she paid yesterday, that account will be there for about 7 more years.
The account status should be changed to reflect that it's been paid/settled, but it will stay on there.

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Wed Jun 16, 2010 11:33 am

AppsAbound wrote:
Not true, not true, not true!

Adverse accounts remain on your credit report approximately 7 years from the date of last payment, give or take 120 days for the account to be charged off.
Most debt collection agencies will not agree to remove the account after it's been paid. That is something that needs to be agreed to in writing as part of the settlement agreement.
And OP was write about stirring it up on her credit report. If she hadn't paid in 4 years, the accounts would have dropped off in 3 years. If she paid yesterday, that account will be there for about 7 more years.
The account status should be changed to reflect that it's been paid/settled, but it will stay on there.


I think you are confusing paying in full vs. settling. Maybe I wasn't clear, sorry. If it is paid in full, and you dispute it to the credit reporting agencies, the agencies are forced to remove it in 30 days. But the key is paying it IN FULL. If you settle for anything less than the owed amount, you could do a tap dance and it won't be removed.

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animalcrkrs
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby animalcrkrs » Wed Jun 16, 2010 11:44 am

OP another hard thing you might face is credit approval for an apartment depending on the cost/your credit score. You should be able to show evidence of your loans as proof that you can pay and might also be able to co-sign here but just something to be aware of.

shutterbug
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby shutterbug » Wed Jun 16, 2010 11:46 am

chicagolaw2013 wrote:
AppsAbound wrote:
Not true, not true, not true!

Adverse accounts remain on your credit report approximately 7 years from the date of last payment, give or take 120 days for the account to be charged off.
Most debt collection agencies will not agree to remove the account after it's been paid. That is something that needs to be agreed to in writing as part of the settlement agreement.
And OP was write about stirring it up on her credit report. If she hadn't paid in 4 years, the accounts would have dropped off in 3 years. If she paid yesterday, that account will be there for about 7 more years.
The account status should be changed to reflect that it's been paid/settled, but it will stay on there.


I think you are confusing paying in full vs. settling. Maybe I wasn't clear, sorry. If it is paid in full, and you dispute it to the credit reporting agencies, the agencies are forced to remove it in 30 days. But the key is paying it IN FULL. If you settle for anything less than the owed amount, you could do a tap dance and it won't be removed.


This is not true. The previous poster was correct - a late or defaulted payment that is finally paid in full does not drop off in 30 days. It stays on your credit rating for 3 years as as a late or defaulted payment that was finally paid.

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Wed Jun 16, 2010 11:57 am

Maybe that's something new in the past few years. I got some fixed back 4 or so years ago and did what I just said, and they were removed within a month. Doesn't make my credit much better though unfortunately (it's a hot mess right now).

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Wed Jun 16, 2010 11:59 am

animalcrkrs wrote:OP another hard thing you might face is credit approval for an apartment depending on the cost/your credit score. You should be able to show evidence of your loans as proof that you can pay and might also be able to co-sign here but just something to be aware of.


Good point there.

My advice: go the Craigslist route. I have a place with my fiance in Chicago...we both have awful credit that we are trying to repair, and he didn't even check. Wahoo!

AppsAbound
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby AppsAbound » Wed Jun 16, 2010 12:05 pm

I'm certainly not an attorney, but I've worked with attorneys who handle credit reporting cases. You might be able to dispute and have it removed, but it's not standard procedure to remove paid or settled accounts. Debt collection companies often don't respond to disputes, so the credit reporting agencies will delete the info.

You have a right to have "accurate" information reported. If something is correctly reported as paid OR settled, it can stay on.

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chicagolaw2013
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby chicagolaw2013 » Wed Jun 16, 2010 12:19 pm

AppsAbound wrote:I'm certainly not an attorney, but I've worked with attorneys who handle credit reporting cases. You might be able to dispute and have it removed, but it's not standard procedure to remove paid or settled accounts. Debt collection companies often don't respond to disputes, so the credit reporting agencies will delete the info.

You have a right to have "accurate" information reported. If something is correctly reported as paid OR settled, it can stay on.


This is what I was talking about. If you've paid in full, the collection companies usually (don't want to make a blanket statement) don't respond to a dispute, therefore deleting it within the 30 days I was talking about. Usually, though, if you've settled, they may still respond, and usually do, because you didn't give them the full amount owed.

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UF Gators
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby UF Gators » Wed Jun 16, 2010 12:34 pm

chicagolaw2013 wrote:
AppsAbound wrote:
Not true, not true, not true!

Adverse accounts remain on your credit report approximately 7 years from the date of last payment, give or take 120 days for the account to be charged off.
Most debt collection agencies will not agree to remove the account after it's been paid. That is something that needs to be agreed to in writing as part of the settlement agreement.
And OP was write about stirring it up on her credit report. If she hadn't paid in 4 years, the accounts would have dropped off in 3 years. If she paid yesterday, that account will be there for about 7 more years.
The account status should be changed to reflect that it's been paid/settled, but it will stay on there.


I think you are confusing paying in full vs. settling. Maybe I wasn't clear, sorry. If it is paid in full, and you dispute it to the credit reporting agencies, the agencies are forced to remove it in 30 days. But the key is paying it IN FULL. If you settle for anything less than the owed amount, you could do a tap dance and it won't be removed.

This isnt true. Just because you have paid your collection account in full does not mean either the credit bureaus or the collection agency has to remove the negative tradeline from your report. This is why you need to get confirmation in writing that they will delete the tradeline before you pay a collection agency anything.

AppsAbound
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby AppsAbound » Wed Jun 16, 2010 12:41 pm

+1

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Ty Webb
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby Ty Webb » Wed Jun 16, 2010 2:32 pm

animalcrkrs wrote:OP another hard thing you might face is credit approval for an apartment depending on the cost/your credit score. You should be able to show evidence of your loans as proof that you can pay and might also be able to co-sign here but just something to be aware of.


I have enough money saved to put up 6 months rent at the start. I'm relatively confident that if I pay 6 months up front, I'll be able to overcome the credit issues. Then I'll probably take my loan money and just pay off the other 6 months immediately so that I don't have anything to worry about.

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Scallywaggums
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby Scallywaggums » Wed Jun 16, 2010 2:33 pm

ScaredWorkedBored wrote:Bankruptcy is a specific issue and automatic adverse credit in the GradPLUS screen anyway, looking back last five years.

By "you can't do it now" I meant "it will ruin your credit in the immediate future, so doing it before trying to get loans for law school is out of the question".

Sparkz1920
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Re: Poor Credit/Trying to grasp the process; what are my options

Postby Sparkz1920 » Thu Jun 17, 2010 2:33 am

chicagolaw2013 wrote:
AppsAbound wrote:
Not true, not true, not true!

Adverse accounts remain on your credit report approximately 7 years from the date of last payment, give or take 120 days for the account to be charged off.
Most debt collection agencies will not agree to remove the account after it's been paid. That is something that needs to be agreed to in writing as part of the settlement agreement.
And OP was write about stirring it up on her credit report. If she hadn't paid in 4 years, the accounts would have dropped off in 3 years. If she paid yesterday, that account will be there for about 7 more years.
The account status should be changed to reflect that it's been paid/settled, but it will stay on there.


I think you are confusing paying in full vs. settling. Maybe I wasn't clear, sorry. If it is paid in full, and you dispute it to the credit reporting agencies, the agencies are forced to remove it in 30 days. But the key is paying it IN FULL. If you settle for anything less than the owed amount, you could do a tap dance and it won't be removed.



Wrong

Once u go into a delinquent status on your accounts and it goes to a collection agency and they report, they dont have to remove a thing. Only after the 7 yr statute of limitations do they have to remove it by law. You can write a letter saying please verify this debt, in which most companies dont do it and it gets removed, but they dont have to do a thing. I have 4 charge offs that i got removed from my report by writing a letter, however the original creditors, i.e. Cap 1, Plains Commer Bank, Express Clothing are still there until 2014


.....And i still have a 665 FICO, and got approved for the Grad Plus Loan.....




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