I am trying to rebuild my credit score. I have a couple charge offs from 3-4 years ago, and I am wondering if it would be more beneficial to pay them off, or to just drive on as I am. I have heard that if you start making payments of delinquent accounts that it lowers your score, and that is my fear. I just bought my car, and don't plan on getting another one for some time, and I plan on buying a house in 5-6 years. How should I go about this?
2006-06-17 22:25:36 · 6 answers · asked by startingallover 1 in Business & Finance ➔ Credit
id say to pay them off a house is a different situation,than a car.sometimes if its a large dept you can make them an offer on how much you would pay, some situations they might take the offer because their happy getting something rather than nothing,I've know-en a person that did this. i too will do this in time. i want nothing in my past to hinder my future. we borrow we owe. lets make a deal.
2006-06-17 22:46:20 · answer #1 · answered by cece 2 · 0⤊ 0⤋
The statute of limitations is most states on debt is 4-6 years. The statute of limitation federally is 7 years. That means that in just a few years, without making any payments, this debt will be gone from your credit report (you may have to request that it be removed but it can be taken off.)
This is very important: if you make one payment toward that debt, you restart the statute of limitations from day 1.
Morally, one should pay one's bills.
Realistically, if you don't pay your debt and lay low for the next few years, it will all go away like magic.
What is the most important thing to know? Don't do this again.
Good luck.
2006-06-18 01:49:34 · answer #2 · answered by reality_check 3 · 0⤊ 0⤋
Since bankrupcy is no longer a viable option, I'd recommend using one of the credit consolidation services. That way, you can make small payments. The service may be able to negotiate a more merciful interest rate and intercept the collections calls.
In addition to temporarily lowering your credit score, another disadvantage of making payments is that you'll open yourself up to collections calls. A credit consolidation service can spare you that. I"ve never understood the logic of harassing a person who is trying to do the right thing.
Good luck to you and congratulations on your forward thinking logic.
2006-06-17 23:14:53 · answer #3 · answered by kentucky queen 2 · 0⤊ 0⤋
Check your state statutes for the statute of limitations on open accounts. If you are out of SOL, you are not legally bound to pay, morally - yes, if you have the money to pay.
If you are planning on paying these off:
If they are in the hands of a collection agency, send a debt validation to that agency first. Make sure that you are paying on the debt that is actually owed and not an inflated amount.
If the original creditor still has the debts (which I doubt after 3-4 years) Send a debt verification to them.
After recieving a response, if they are reporting on your credit reports, send them a "pay for delete" letter.
Include in that letter a request to pay a percentage of the amount.
(A junk debt buyer may have purchased the account for pennies on the dollar (or maybe even pennies on the $100.00). A collection agency may have purchased the account for .25 to .50 cents on the dollar.) Also include in that letter that they will delete the account from your reports, they will not continue to try to collect, they will not sell the account or sell the remainder of the account, if they take your percentage offer. (if they are not currently on your reports, include that they will not begin reporting)
Pay by cashiers check.
If you "cannot" afford to pay:
If you are still in SOL, I would suggest waiting.
If you are out of SOL, send the collection agency a debt validation letter - certified mail return reciept. Then send a dispute to the credit reporting agencies. After recieving a response from the collection agency, send a SOL letter, showing your states statutes proving that you are out of SOL for collection.
I would also suggest doing a google or yahoo search for - credit repair boards.
There are many self help credit repair boards on the web that can help you learn how to manage your credit repair by reading how others have done theirs. Check out a few until you find the one(s) that you like.
2006-06-17 23:21:13 · answer #4 · answered by echo 7 · 1⤊ 0⤋
It does lower your score but only temporarly. Then it comes back up. In the long run it's better to pay them off.
2006-06-17 22:31:21 · answer #5 · answered by blondie22334455 4 · 0⤊ 0⤋
I HAVE SOME CADS BILL I WANT REBUILD MY CREDIT
2006-06-17 23:44:16 · answer #6 · answered by raza_yoursraza 1 · 0⤊ 0⤋