Mortgage credit report: Nice FICO scores with chargeoffs and Asset Acceptance collection

The most recent collection (Asset Acceptance) was assigned in 7/10 and it IS rated despite the dispute notation.  My client just received his new mortgage credit report:

EQUIFAX/FACTA BEACON 5.0
SCORE: 678

00038 – SERIOUS DELINQUENCY, AND DEROGATORY PUBLIC RECORD OR COLLECTION FILED
00018 – NUMBER OF ACCOUNTS WITH DELINQUENCY
00014 – LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
00010 – PROPORTION OF BALANCES TO CREDIT LIMITS IS TOO HIGH ON BANK REVOLVING OR OTHER REVOLVING
ACCOUNTS
FA – NUMBER OF INQUIRIES ADVERSELY AFFECTED THE SCORE, BUT NOT SIGNIFICANTLY

TRANSUNION/FICO CLASSIC (04)
SCORE: 673

038 – SERIOUS DELINQUENCY, AND PUBLIC RECORD OR COLLECTION FILED
010 – PROPORTION OF BALANCES TO CREDIT LIMITS IS TOO HIGH ON BANK REVOLVING OR OTHER REVOLVING
ACCOUNTS
013 – TIME SINCE DELINQUENCY IS TOO RECENT OR UNKNOWN
020 – LENGTH OF TIME SINCE DEROGATORY PUBLIC RECORD OR COLLECTION IS TOO SHORT
FA – INQUIRIES IMPACTED THE CREDIT SCORE

 

EXPERIAN/FAIR, ISAAC (VER. 2)
SCORE: 701

38 – SERIOUS DELINQUENCY AND PUBLIC RECORD OR COLLECTION FILED
18 – NUMBER OF ACCOUNTS WITH DELINQUENCY
14 – LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED
33 – PROPORTION OF LOAN BALANCES TO LOAN AMOUNTS IS TOO HIGH
08 – TOO MANY INQUIRIES LAST 12 MONTHS

My client had a default judgment from Cap One and they garnished his wages right after we got started about a year and a half ago.  Notably, Cap One continued to report $9 as past due even after they completed the garnishment until we disputed.  We got a couple of collections still on the reports and a couple of collections were deleted after disputes.

Portfolio Recovery deleted after my client sent a letter disputing the debt and asking where they got his cell phone number.  Portfolio had called his cell phone numerous times and left recorded messages.  With minimum statutory damages of $500 per call and possibly $1,500 per call for “willful and knowing” violations of the TCPA (using automated dialing equipment and recorded messages without express consent), they know when to quit.  My client SAVED all messages and logged all calls to his cell (you don’t have to answer, each auto dialed call violates the TCPA) and he COULD sue.  Most likely, he won’t sue because they deleted from the credit reports and suing IS a hassle if you don’t have an attorney.

Asset Acceptance is still reporting and this dispute is published at Debt Buyer Asset Acceptance Incorrect Credit Reporting and Collection Inquiry.  The New Mexico attorney general “consumer advocates” should at least be honest instead of deceiving consumers.  As we documented, they represent the collectors and debt buyers and the LAW and the TRUTH mean nothing to them.

As you can see, the Asset Acceptance hard inquiry after they were informed of the dispute contributes to the Experian INQUIRY score factor 08 “TOO MANY INQUIRIES LAST 12 MONTHS”.   My client’s other inquiries were by Capital One and in April he was prequalified for the mortgage (yes, it counts.)

“Somebody” needs to sue Asset Acceptance for the fraudulent interest charges and lies by their collectors.  If the mortgage underwriter requires that this collection is paid before closing, I hope my client will sue them.

Student Loans cause the Experian factor 33 – PROPORTION OF LOAN BALANCES TO LOAN AMOUNTS IS TOO HIGH as those are his ONLY non revolving accounts with balances.

A revolving balance lowers the TU and Equifax scores significantly:  010 – PROPORTION OF BALANCES TO CREDIT LIMITS IS TOO HIGH ON BANK REVOLVING OR OTHER REVOLVING ACCOUNTS.

While Capital One sued my client and then garnished his wages, they did give him a new $500 credit card.  They probably hope for another couple thousand dollar judgment for a few hundred dollars in legitimate debt.  I’ve even had clients get new Capital One credit cards while there were still unpaid Cap One charge-offs on the the credit reports.

His Cap One balance on the mortgage credit report is $267 and the limit is $500.  TU and Experian also show a GEMB/Banana Republic card from 1999 with a $0 balance and a $1,700 limit.   It was NOT rated for the TU FICO score in May.  I thought it was because the account had not been used since 2003.  However, there was a small balance reported on the July Experian report and it is now paid.  It looks like TU still does not rate the account because the revolving balance SHOULD not be the 2nd score factor when he owes less than 25% of the limits, but I can’t say for sure as I don’t have the current TU myFICO and the mortgage credit report does not include the actual percentage.

There is no point to wasting more money on credit reports as we only needed 640+ scores for the FHA loan.   If my client was looking for a Fannie Mae or Freddie Mac loan, I’d go through the Equifax and TU myFICO reports and my client could have easily eliminated this factor by having a reported $1 balance when the mortgage credit report was obtained.

We started with 586 and 625 scores for TU and Equifax and it’s been quite a bit of work, but with an optimized balance on the Cap One account all scores would be around 700 WITH several charged off accounts and 2 collections.

It’s this nasty four letter word: WORK.  My client had to answer my many questions and spend time and money on sending the letters.  But if you want to buy a house, it’s obviously worth it.

 

 

 

 

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