super new member, but LONG time reader needs advice

[mariorivera830]

good morning everyone! Please let me apologize in advance for any grammatical or spelling errors, as I am posting on my phone and my space bar acts crazy sometimes.

as the title says, I have been reading everything I can read for a little while now. I am currently trying to rebuild my credit in hopes of buying a home soon. But my scores are pretty low I'm sure. I was SUPER surprised when my credit union approved me for a loan for a truck for me and my family and gave me a credit card with a 1000 limit. Sure the truck loan is at 15.99%, but we needed a car that wasn't going to fall apart on these California freeways. But I haven't been able to get credit at best buy, target or walmart (all places that we frequently shop at and can pay off the card instead of using cash). So here is my long story, please feel free to skip to the actual questions part.

story:
I was never taught about credit in my house, my step mother walked all over me and my dad let it happen and as soon as I got the chance I bolted for the Marines in 99. I got my first credit card from first premier bank then got a military star card ( for use in military PX/BXs) and was late all the time. Never paid my bills on time and pretty much everything else an uneducated person does to their credit.

most of my mistakes have fallen off of my reports or been paid off. I did one tour in Iraq in 02 and thankfully I was married to a responsible woman who did most of the paying off. But when I came home and got out of the service we fell into the same hole as I had a hard time getting and retaining work, (i was pretty messed up in the head for awhile but am getting help from the VA now) more collections and unpaid bills undid the hard work she had done. Fast forward 6 years and we FINALLY get to the part where I ask for help

the help:
I have not gotten my FICO scores yet, but I'm guessing they're in the high 500s to low 600s. I checked my reports and have 8 good standing accounts (including the truck and credit card which haven't been late) and a total of 18 bad accounts spread across my three reports.

I have one charge off from First Premier bank, 8 collections accounts from Kaiser (from my daughters birth), and 9 other collections accounts from other small dumb things we had before i got the job I have now (going on 5 years!!!). All the accounts are mine and within the SOL.

heres where I need help. Where do I start? I have money to pay, unfortunately, it's not enough to get everything off paid in full. Where should I start, do I pay off the small ones, the big ones, the medical ones, do I ignore the medical ones? Is it something that I can do myself? Should I call that law firm people on here have used? What's the cost and what can I do to help our home buying quest? We plan on using the calvet home loan program or any variation of the fha/va home loan.

thank you all for making this the most informative place to read about credit and also in advance for your help. If more information is needed I will furnish it later tonight from home where my reports are. Thanks again

Mario Rivera

[mariorivera830]

there migt be some errors on the numbers of bad accounts, but there are 18 for sure. And another question is should I try to get these collection agencies to accept less than the amount that was sent to colections? (and how much if so?)

one lat question, what have been the typical results from the law firm? Would it suit my situation to use them or can I do it myself?

[chane]

I think the best place to start is in the Beginner's section. Read everything you can about credit and debt. Knowledge is power. The credit system is a game and if you don't know how to play it, you're not going to win it. The rules of the game are not fair, the system is set up to insure that banks and other creditors profit as much as possible. They don't care about your situation or helping you out.

However, it is possible to win the game if you understand the rules and use them to your advantage. And when that happens, life is much easier and better.

Read all you can and teach your kids early. Teach your friends and family as well. Too many good people are playing a game that they don't understand and it leads to a miserable life and it shouldn't be that way.

Best of luck, let us know if you have any questions. But, first make sure you read everything and search for the answers first. If you can't find them, post the question and we will help as much as we can.

[mariorivera830]

thank you for your reply, but I have been reading and searching for a situation similar to mine but have not found one yet. I'm looking for any information on which collection accounts to target first ( larger amounts or smaller amounts) and if I should choose to request a PFD less than the reporteddebt amount and by how much.

again thank you for your response and hope that I have not missed a post or sticky with that information.

[chane]

It depends what you're trying to do. If you want to get items off your credit report fast, start with small accounts. If you're trying to pay down debt fast, start with the highest interest rates.

You should definitely send PFD and negotiate lesser payments.

[mariorivera830]

thanks again! That was definitely an answer i feel comfortable telling my wife. Unfortunately your answer brings about a whole new question: "what AM I doing?" like I said before, we're trying to buy a house, so what should I be doing? My debt isn't any kind of loans, credit cards or anything like that anymore. Aside from 1 charge off, the rest are medical and past due bills sent to collections. I think in total from all 3 reports i would need 7000-7500 to completely pay off everything if I paid in full.

now chane, do you know which route would best serve my situation in buying a home? Or what is considered by the banks when looking at credit reports? I heard somewhere (like most rumors start) that medical collections are not really looked to hard at by lenders. Any chance this might be true?

[chane]

You need to pay off your debt and get the negative items removed for your best chance at getting a home.

As far as what you should be doing: Read as much as you can in the beginners section. It covers most everything you need to know.

[mariorivera830]

ok Chane, I had to go back a few pages on some of the threads, but found some info on a starting point on negotiating a PFD. Starting around 35% of the total debt is what I've found to be a good point to start at. Would you agree with that? Or is that just going to piss those guys off. I've read some messed up stories about some of these CAs. Sorry if it seems like I'm spamming it up here, it seems like every answer u give brings up another question. Thanks for your patience though.