i m planning to buy my first house with in the next 9 months, but in my credit file i have 2 chargedoff accounts they're 4 yrs old. ,,my question is should i pay them off with the original amount or settle them with a haft of that, or whats the best way should i do. thank you so much. waiting for some good advises.
2006-09-19 17:42:31 · 8 answers · asked by diep d 1 in Business & Finance ➔ Credit
You may find yourself in a situation where you need to pay a collection account. Maybe you have to for a home loan or perhaps the item is not coming off your report and it is quicker to just pay.
One tactic you should ALWAYS try first is: Pay for Deletion
Basically, you tell the credit agency that you will pay (in full or a %) in exchange for deleting the item from your credit report. It is a simple form they have to fill out to do it and it is done ALL the time. Some credit agencies will try to lie and say they can't do it. They are really just saying, they don't want to.
You need to ALWAYS get it in writing. If not, you have no legal ground to stand on. Below is a sample pay for deletion letter. You may need to call the credit agency and talk to them. Your money is your leverage.
In no case should payment be sent before you have a signed agreement in your hands.
This letter is just an example, you can and should modify it to your desire.
http://www.creditliberty.com/credit-repair/pay-for-deletion-letter.html
2006-09-19 18:40:16 · answer #1 · answered by DaMan 5 · 1⤊ 0⤋
If these accounts are already 4 yrs. old, it would do more damage to pay them off now. If you really want to pay them off, wait til after your get your home loan.
The longer a debt remains unpaid, the less of an impact it has on your credit score. Once you pay, the activity looks more recent and your score will drop. Even after you pay off the accounts, they will only remain for 3 more years anyway.
The Collection agency will probably go for a settlement offer. If you do settle and if it's within your budget, try not to go over the $600 discount. If you settle for more than $600 off the balance due, you'll have to claim it on your taxes as income.
A mortgage broker explained this to me a while back. As he said, you think you're doing the right thing by paying off your debt when in fact you're actually hurting your score. Paying off old debts look more recent and does more damage to your credit.
Good luck! ; )
2006-09-20 13:12:33 · answer #2 · answered by Celeste 6 · 0⤊ 0⤋
Settle them and pay them off then wait 6-9 months before you try to buy a house to let some of the bad ratings get off your credit.
2006-09-20 00:47:31 · answer #3 · answered by Ms. Lise 4 · 0⤊ 0⤋
You can pay them off, or settle, but if you settle, ask and if agreed, and get it in writing before send a payment that once the agreed amount is payed that on your credit report it will be changed from charged off to PAID IN FULL even if you settled. It looks better than settled. If they don't agree to put it as paid in full, I would leave it as a charge off, because that is just as good as settling. But the FTC at http://www.ftc.gov/bcp/conline/edcams/credit/coninfo_reports.htm can also give you more info.
2006-09-22 18:36:10 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Charged Off Accounts Will remain on your credit report for seven years from the date of the initial missed payment that led to the charge off which will be the original delinquency date. Even if payments are later made on the charged-off account.
So I would not recommend paying the charge off accounts without first settling a % of the debt.
It has worked very succesfully for myself before I bought my first house. I was amazed that it worked. Once I settled the first debt for a fraction of what was owed I simply repeated this on all my chargeoff accounts (there were a few).
I got them to agree for the low payoff by fax its faster.
VERY IMPORTANT- Please read My first hand experience with this can help you prevent the same mistake I made on my last charge-off on my credit report that I wanted to settle on...
The very last company I tried to settle my debt with actually PUllED my credit report within SECONDS of me being on the phone with the rep who turned out to be the manager. And what did she see on my credit report that caught her attention and blew the whole deal when I tried to settle my debt for less??? Guess?? Go on Guess??.....
Well she saw that I had inquiries on my credit report with mortgage companies which told her that I was shopping for a loan and she KNEW I needed to settle and she wouldnt settle with me. So I ended up paying the whole debt wich was actually considerable amount.
So lesson or.. tip that is. Do not go shopping for a mortage loan until you get your credit in order.
2006-09-20 05:01:35 · answer #5 · answered by CreditScoreBooster 2 · 0⤊ 0⤋
What? Didn't know there was an option to settle for half the amount you owe. Or is that what you meant? Is this an account that is four years overdue?
Sorry to be so thick headed, but I'm really not sure what you're saying here.
2006-09-20 00:46:29 · answer #6 · answered by old lady 7 · 0⤊ 0⤋
If the accounts are already showing as charged off then they have written you off basically. If you want to pay the account then you need to see if they will remove the charge off from your credit report. You also needed to file those charge offs on your taxes.
2006-09-20 00:46:27 · answer #7 · answered by GRISSIOM PURE GENIUS 3 · 0⤊ 0⤋
pay off your accout before you buy your house and wait about nine months before you buy good luck
2006-09-20 02:58:14 · answer #8 · answered by pattibcacl 6 · 0⤊ 0⤋