Help! Will this help to get my credit back? - Posted by CJ

Posted by Rob FL on May 08, 1999 at 19:25:35:

Leave to you Hal. I totally agree, something like this would probably be much easier for someone trying to start over with their credit.

Help! Will this help to get my credit back? - Posted by CJ

Posted by CJ on May 07, 1999 at 15:00:35:

Here’s my situation. I had a Visa charge-off of $7000 and have just completed my final payment. I realize this will stay on my record for 7 years. I own a $185,000 home w/ $100,000 equity. I also have $5000 to try this out w/…tell me if it would work please. I walk into a bank this weekend and tell them I want to open up a 6 month CD w/ the sole intention of borrowing against that equity to build my credit. Is this a logical thing to do? If not, in my situation what other avenues would you folks suggest.

Thanks a bunch-


Re: Help! Will this help to get my credit back? - Posted by K greene

Posted by K greene on May 10, 1999 at 19:05:55:

The above ideas sound great to have a secured card, however the charge off will still remain. I would negotiate with the card company or as a final payment write a letter that this is payment in full and all deragatory credit shall be removed, send it registered to reporting agencies. Upon acceptance of check the agency must remove the deragatory credit. Almost like ATT when they send you a check and if you sign you will be one of their customers. It will take some work but it can be removed. Good Luck

Re: Help! Will this help to get my credit back? - Posted by JPiper

Posted by JPiper on May 09, 1999 at 14:09:48:

My guess is that you could get an equity line against your house with the type of equity you have, assuming you qualify according to income. Give Beneficial a call…ask about their programs.


Call Capital One or Providian Bank - Posted by raelynn mitchell

Posted by raelynn mitchell on May 08, 1999 at 13:36:10:

Capital One is 800-262-1493. Providian is 800-356-0011.

Ask them about their secured credit card programs and tell them you’d like to apply. Tell them you have $5,000 to put towards an account. Also ask about their other options. Some credit card companies, like Providian Bank, offer 150% and 200% accounts, meaning you put up $5,000 and you get $7,500 (150%) or $10,000 (200%) in credit. They may or may not start out that way, depending on your particular credit report (which you should get a copy of now from all three bureaus).

Ideally, in some cases it is better to have one or two $5,000 accounts than numerous smaller accounts because when the time comes to apply for unsecured cards they will consider the size and history and credit available on each of the other accounts. In other words, if you had 5 $1,000 secured accounts and you go for an unsecured card, they will be more likely to give you $1,000 unsecured than $5,000. If you have 2 $2,500 accounts, it is more likely that you will get another $2,500 account. Another thing to consider is, once you open that secured account for whatever amount–let’s just say $5,000–try not to let the account balance get higher than half of the credit limit or in some cases it will create a situation where you cannot get other credit or that other credit will be at higher interest rates.

So let’s say you open an account with $5,000. You could take $2,500 off the card and turn around and open another secured account, using the $$$ from the first one, for $2,500. Now you have a $2,500 account and a $5,000, account, all for the $5,000 you initially started with. If you wanted to, you could again take half that, or about $1,200 or so, from the $2,500 card and go after a secured card with a third source or one of the other two (say Visa if you got Mastercard before) and get a third card. Now you have 3 cards, each with perfect payment history (be sure to pay them early) after 7 or 8 months.

Also, Wells Fargo Bank and many credit unions offer secured cards as well. Check with your bank or credit union as well; they may have a secured card program that they don’t talk about much.

Other sources include: Sterling Bank (kind of expensive as far as the fees go), and First Consumers Nat’l Bank. I don’t have their numbers right here.
As an interesting footnote, last time I was in Las Vegas, just about every hotel I went to had applications all over the hotel for First Consumers Nat’l Bank secured cards. It was interesting to see them displayed near the cashier’s cages!

Re: Help! Will this help to get my credit back? - Posted by Rob FL

Posted by Rob FL on May 07, 1999 at 22:02:22:

If it were me, I would avoid this long drawn out process. It is a good idea for someone with no credit, but since you have just paid off this old charge-off, I recommend to start applying for some more credit cards. Even if you need to get a secured credit card or a depatment store card. You can build up your credit much faster. Once one or two of them approves you, the rest of the credit card companies will be glad to join the bandwagon.

Re: Help! Will this help to get my credit back? - Posted by Rich_PA

Posted by Rich_PA on May 07, 1999 at 17:06:21:

Just put the money in a passbook savings and borrow against it, using the savings acct as collatoral. Do two banks at once with $2500 each, or three would probably be better at about $1600 each. Pay them off better than agreed-- earlier and sooner, but stretch them out longer than six months for credit-reporting reasons. It costs very little to do this. Most banks would be very happy to have the payments automatically made from your checking acct if you have one there; no chance of late payments (you can usually choose the payment date-- choose much earlier than the due date). Many books on real estate and credit repair explain this.
A question about your charge off-- Why do you have a “final payment”, or ANY payments, if it was a charge-off? If you really ended up paying it off, then you should be able to negotiate for its removal from your credit report.

Re: Help! Will this help to get my credit back? - Posted by Rick_(MD)

Posted by Rick_(MD) on May 07, 1999 at 16:40:05:

Here’s what I did:

Opened a savings acct in bank #1 for 1K. Talked to loan officer about re-establishing credit with a 1 year loan secured by the savings account(Must be a minimum of 6 months or it will not show up on your credit report). Negotiated the price for the loan 'cause I didn’t get to keep the money. 13.75% dropped to 6%. At the time I didn’t think about it but the savings account paid me 3%. After the smoke cleared the interest was 3% on the loan. I made a payment every Friday for 4 weeks(@ about $85. a pmt.(pays of loan early)) and then started regular monthly payments after that. You will walk out of the bank with your initial 1K seed money from the loan.

If you can afford the extra payments do this two more times. What you will wind up with is 3 bank loans paid “Better Than Agreed” which is about the best reference that I know of.

Each loan cost me about $12.00 in interest. Can only get better using a CD, but will tie up your money for the whole year instead of about 9 months. I read about this in a book a while back, but couldn’t remember the name or author. Will re-post when I think of it.

EZ Credit Resource - Posted by HR

Posted by HR on May 08, 1999 at 07:55:26:

You know in the Stationary stores where they sell the EZ legal forms: rental agreements, etc? Well, they have a credit repair kit there too. I bought it and used some of the ideas and it is very good. I would heartily recommend it for $15. I was able to improve my credit from good to great over 9 months of using the techniques. Also, remember with credit: each day of its good use only helps your cause. What you did in the past was the past. And the further in the past, the better.

Good luck,


Rich…I set up payments w/ - Posted by CJ

Posted by CJ on May 11, 1999 at 08:05:43:

A question about your charge off-- Why do you have a “final payment”, or ANY payments, if it was a charge->off? If you really ended up paying it off, then you >should be able to negotiate for its removal from your >credit report.

Rich, I set up payments through a collection agency and completed all my payments.

Another question, Is it better to pay the full amount of the debt or pay the “settlement” amount which can be much less? The collection agency offered to drop the amount from $7000 to $5000 if I could pay it in one lump sum. What would have been the betterthing to do? Would I still be able to take that off my credit record?

Thanks for all the help!