REPAIRING BAD CREDIT.... NEED EXPERT ADVICE

I cosigned a rental apartment for my mother 2 yrs ago, bc her credit was shot from divorce, etc... So i signed her an apartment, I bought an investment property and decided to have her as my landlord for the property this past spring. However when she moved out she ONLY gave the management group of the apartment building 7 days notice. Since the apartment was on my name, the apartment building claimed they required 3 months notice, etc,etc and took it to court, indicating i owe them those months rent because of the late notice. My mother was probably aware of such a notice. She neglected it, which I am Furious about since it hurts my credit.

Now this is on my credit bureau and it is hurting my credit score badly. I can;t get a lone or a mortgage for another investment.

I will have to pay off this debt, i understand that. I spoke to the bank and they said even if you pay it off, you will only be able to get a line of credit or loan if you have a cosigner. I definitely dont want a cosigner.

How can I raise my credit score as soon as possible after I pay this off? My credit has already been damaged and they said that will remain on my record for 7years.

Im sure others have been in similiar situations, I'd like to know how they overcame such a problem.

Thank you,

Jon

Edited: 06/26/2010 at 03:53AM

Account Closed

3396 posts
-103 Influence
3 Awards

Icon_minipost Aug 15 '07, 06:54 PM

Jon,

You are listing Toronto as your city. The advice is specific to the US but might be the same for Canada. A Canadian will have to chime in to confirm.

All lenders or creditors who report activity are able to have anything they reported removed from a credit report. You can negotiate a payment with the apartment complex where they agree to pull the item completely in exchange for the agreed payment (less than what is owed, the full amount, or even higher - what ever is agreed). Have then formally write up what they are agreeing to. Maybe better would be for you to write it and they sign. When you have the sign agreement promptly pay them. They then need to request the item to be removed. As you have a letter you can also challenge the item on your credit report if it somehow still exists. That will be enough for the item to be removed.

A court action is part of the public record. Hence getting court records is not the same. It might continue to show but at least show as closed. If you were not notified of the action the judgment might not even be valid. A lawyer can tell you about the legal process.

Warning: As I noted the above is very much US centric advice. Canada might be very similar or it might not be. I just have no specific knowledge for how Canadian credit reporting works.

John Corey

Edited: 06/26/2010 at 03:53AM

Susan Gozali

Residential Lender

21 posts

Icon_minipost Sep 14 '07, 04:38 AM

Hi Jon,

I'm sorry for your situation. Anyway, here is what I found on KPMG Canada site.

An individual has the most control over their credit bureau report. Correct information must remain on the credit bureau report, so if there has been a judgment or bankruptcy, the information MUST remain on the credit file for the requisite number of years. Many agencies advertise that they are able to remove debt or " fix" credit history, but removal of correct information is not allowed. Attempt to have incorrect information adjusted through your own efforts prior to obtaining help; obtain help from competent lawyers or paralegals.

I'm a mortgage broker in Vancouver, BC. I would advise you to use a mortgage broker's service, since he/she would have more bargaining power against the banks than you do. In most cases, as long as you have strong explanations about it, lenders would not weigh their consideration so much on the beacon score. In addition, I'd suggest you to get a secured credit line, such as a secured credit card, to build up your beacon score.

If you have any further questions, do not hesitate to contact me, I'll be happy to assist you. Good luck with everything!

-Susan Gozali-

Edited: 06/26/2010 at 03:59AM

Fletcher Batts

· lagrange, GA

17 posts
10 Influence

Icon_minipost May 26 '08, 04:47 AM

Dispute the items anyway. As stated, the law states that correct and accurate information can not be removed. How are you so sure that the information provided is accurate. By disputing the negative on your report, you start a process called validation. The creditor, in this case, the public records division at the courthouse, have to provide proof that this account actually belongs to you. Also, you need to send in verification letters to the apartment complex. By law, they have to show documentation that this account actually belongs to you. They have to physically show you these documents. Again, if this does not happen, they have to remove this information.
One more thing, mom is screwed. Although, you were a co-signer, you have stated that she may have known this information but you did not. Did you get a copy of the lease too? Were you aware of all penalties that went with non-payment? Don't answer them, literally, just asking...if you did/were not aware, you had to be notified of this action, public record, before it would be placed into collections and then added to public records.
Option B: If you are adamant about paying it off regardless of circumstances and considering it is mom, like the other guy said, when and if you pay this off, create a contract that states that upon payment in full all instances of this account will be removed from your report. Send this with a payment, get a copy of it, a copy of the receipt and send them to the credit report.
As far as rebuilding credit...I have already posted about this...I can repeat if you like...

Edited: 06/26/2010 at 05:15AM