Hey everyone, my boyfriend is coming home in a few months and i am helping him prepare for our future. I got his credit report and he now has horrible credit because he obviously could not pay his bills for the oast 2 years he has been incarcerated. So does anyone know what to do? Can it get cleared up if i we explain he is in prison, or does he just have to rebuild it?

To my knowledge you have to completly rebuild your credit. I would call and talk to the credit agencys, they will be able to work with him to get it back on track.

Yeah That Is What I Thought, As Of He Doesn't Have Enough To Worry About. Thanks

You can start now by disputing every negative on the credit report. Some of them will drop off. There are specific steps you can take after you have disputed a couple of times.

The second part of the equation is to have some positive credit. The easiest way to do this is for someone to add him to an account that is in good standing. Instant good trade lines. he will want to have several positive trade lines.

The other way to establish a good trade line is to get a secured credit card. There are several banks that offer this. You pay a deposit and they give you a credit line equal to the deposit. First National Bank of Marin, Orchard Bank, Bank of America are a few that come to mind.

I would like to add don't fall for those scams wanting money to wipe you creidt report. Stay away from those. Also capital one, and aspire visa cards have credit lines for people with bad credit. I think they start out like with 200 woth credit then they increase them if you make timely payment etc

good luck

Once he's making money, look into one of the consumer credit counseling programs. A friend of mine joined one when she paroled. They take a certain dollar amound out of her checking account once a month (pre-approved, via automated clearing house) and then send checks to all of her "old" creditors, paying off the stacked up bills bit by bit. So not only does she (or in your case he :)) not have to worry about getting checks in on time, etc., but, the service will also go to the creditors and negotiate lower interest rates, eliminate "over limit" fees, etc. so you're actually making progress.

(Another option is bankruptcy, but you have to petition for that, and a bankruptcy stays on your credit report for 10 years, vs. 7 years for the delinquencies / write-offs that are presently on the on his account, and if the old accounts have been paid in full, they don't weigh as negatively on the credit as they normally would after a couple of years...)

thank you sooo much guys...i knew i could get some great advise here.

A word of warning about consumer credit counseling. To an underwriter, CCC is looked at the same as bankruptcy. Basically they are doing the came thing as a Capter 13 BK without the courts involvement.

A word of warning about consumer credit counseling. To an underwriter, CCC is looked at the same as bankruptcy. Basically they are doing the came thing as a Capter 13 BK without the courts involvement.

My understanding of the process is (I'm not involved, but I read all the legalese when my friend was setting hers up):

Probably depending on the agency you go through (she used an outfit called Profina), the agency itself doesn't report your status to the credit bureaus. However, some of your accounts may. Like, one of her creditors, a credit card company, sent her a letter that basically said, "sure, you can do this, but (a) you can't use the account any more, (b) we're going to monitor your credit file and if we see you open any new lines of credit, you're saying to us, "hey, my circumstances have changed and I no longer need to participate under these terms, go back to our original agreement -- high interest rates, etc" and, (c) we'll report this account as being managed through a CCCS until it's paid off.

So, while I can't say for sure that it's "not as bad" as a bankruptcy, my understanding is that once your accounts are paid and drop off or show up as "paid" on your credit report, there's no indication you were under such a program... That may be incorrect, ask if you're not sure.

I do know that for my friend, there was no way she was going to ever get ahead at 26+% interest rates and late fees and over limit fees and . . . and the CCCS was a godsend for her. (I suspect, too, that she may not yet be organized enough to get every check every place it needed to get to, on time, every month ... With the ACH payments that's a dozen things she doesn't have to worry about. And after 2.5 years inside and another 8 months of parole to go, the fewer things she has to worry about... ;))

FWIW, the FTC has lots of good info on the various types of services out there...

http://www.ftc.gov/bcp/conline/pubs/credit/fiscal.htm

Also, this bit from the Treasury Department is interesting:
http://arc.publicdebt.treas.gov/files/pdf/fscreditcounsel.pdf


Consumers may wonder whether undergoing credit counseling will tarnish their credit reputation. Fair, Isaac and Co., which developed the FICO credit score, said the calculation no longer factors in whether someone is in credit counseling. "It does not affect your FICO score to have any indication on your credit report that you have sought or are currently seeking credit counseling," said Craig Watts, consumer affairs manager at Fair, Isaac. However, individual creditors may still raise their eyebrow if they see you're in credit counseling.

"It depends on how the credit counseling agency structures their payment," said Catherine Pulley, spokeswoman for the American Bankers Association, which represents banks. Say a credit counseling firm negotiates with a creditor to reduce your debt. "In essence, they're telling creditors you can't pay 100 percent, but you can pay 50 percent, so let's agree on what you can pay, so they're negotiating a lower balance for you," Mr. Watts said. "Creditors are likely to report that activity back to the credit bureau in a negative way, because from their perspective, you have reneged on your original promise, and that will lower your credit score."

But, those entries drop off after 7 years (vs. 10 for a bankruptcy), so ... Six of one, half-dozen of the other.

Sometimes it is better to file bankruptcy and sometimes it is better to do the creidt thing. Alot of people assume the credit counseling is better for you. not always and it does not show up on your credit report as paid. It shows as account settled. I worked in a collection agency and can tell you how they do it. Everytime the creditor sells your file to a collection agency they add a crap load of fees. So a $300.00 credit card can become a $1500.00 credit card. If you call the colleciton agencies and tell them you would like to settle the account for 50% they can set you up on two/three/four payment plan until it is paid off. DO NOT DO THIS UNLESS THEY SEND YOU A LETTER AGREEING TO THIS. Save all your letters that they send to yo agreeing to this. Unfortunately, it is easier to reestablish credit once you have filed bankruptcy.

I was referring to mortgage underwriting and it is indeed looked at the same way as a bankruptcy.

I was replying to strasse where they said they are considered paid. Not to underwriting mortgage. To some creditors they do not look paid and it may be easier to file bankrupcty depending on how far in debt.


I was referring to mortgage underwriting and it is indeed looked at the same way as a bankruptcy.

not always and it does not show up on your credit report as paid. It shows as account settled.

I'll ask next time I'm over at her place. My understanding of the plan she worked out was that all of her accounts' balances due would be paid in full, but at a lower interest rate and with suspension of fees. As the accounts became paid in full (and a couple of her smaller ones have dropped off already) I *believe* they were being marked paid, but I'll check.

The one thing I do know ... When she first got out and was crashing on an air mattress in my living room, no apartment complex would touch her based solely on credit. After a few (3 or 4, don't remember when she started the process) months on the program she was able to get a studio apartment with just the regular security deposit, no additional "credit problems" security deposit, in a gentrifying area of Hollywood. (No one in this area is concerned about a mortgage, with 1 bedroom condos starting in the mid-$500,000s! I don't know a single associate at my firm -- who all make six figures -- who has bought; everyone's renting.)

also something to keep in mind. Any account that you settle for less than the full amount. The forgiven amount can be taxed as income. We received several surprise 1099's one year.

I totally agree wit what LAT said!!! Im a mortgage broker..credit counseling is just as bad as a bankruptcy!!! A bankruptcy will drop your fico about 100 points. Credit couseling will drop it about 75 and u still have to pay the debt back. It will say on credit report that you settled for less than the full amount, and you will have to pay part of it back. Im about to head up state for 12 months so i declared ch 7 BK to wipe out all my debt. I kept 2 cards with 0 balances untill after the bankruptcy and then i put 1000 on each of them, left money with somone to pay the bills while im away and there you go... no bills when i come home and no lapse in credit history. And in terms of purchasing a home a sub-prime lender while have no problems approving somone 1 day out of bankruptcy!!! as long as you have good credit!!