I unfortunately managed my credit poorly while in college, and now, over 10 years later, I am slowly trying to repair my credit. In addition to student loans, I have two credit cards in collections that I owe over $2000 total on. I also have a phone bill that has been in collections for 4 years (over $400) that I have not paid. They recently sent me a good deal to match payment dollar for dollar, essentialling cutting my debt to them in half. However, I heard that utilities are not a detriment to your credit score - collections or no collections. In prioritizing what gets paid first and what will help repair my dismal credit score, should I put the phone bill on the back burner compared to keeping my student loan up to date and pay off those two credit cards?
2006-10-31 09:02:43 · 11 answers · asked by sjrae 2 in Business & Finance ➔ Credit
Go to annualcreditreport.com and get a copy of all three credit reports, free. If any of these past owed debts are on there, you can bet every penny you make that it is affecting your credit score. Most lenders will over look medical bills, but they see you aren't paying your utilities and they say, those are essentials monthly bills, if you can't pay them, why would you pay us.
You can always get a deferment on your student loans. Or just cut back your spending and pay off the utility bills.
If you aren't using the credit cards anymore, you can try and negotiate with the companies to get them to quit adding interest, and if you have the money to do it with them as well, offer them a settlement payment.
Remember, anytime you settle with any creditor to pay less than the amount actually owed, get them to agree to report it on your credit report as paid in full. And get that in writing before you send off any money. Paid in full looks better than settled for lesser amount or charge off. If they won't put it in writing, don't agree to it.
2006-10-31 09:12:40 · answer #1 · answered by Anonymous · 1⤊ 0⤋
on your student loans have you tried to get a deferment..there are lots of ways to defer....economic hardship being one. Or you can go income sensitive which is based on your income or interest only which will go 2 full years. Then you won't have to worry so much about them. I would pay the credit cards because the interest rate is so high. Utilities can't charge interest..Pay them 5.00 a month. Also might want to consider finding a bill consolidation place..they will consolidate all of your bills (not loans) and come up with an easier payment for you. It will also stop the interest and late charges. Then you just pay the one bill to the consolidation place. If you have more than 1 student loan, combine the 2 and then make one payment..I would consider all of this carefully.
2006-10-31 18:13:36 · answer #2 · answered by chilover 7 · 1⤊ 0⤋
Any collection, whether it is for a utility or other, which is reported to the bureau is creates a negative effect on your credit. I would pay off the student loan and the credit cards first since the interest rate is higher on those.
2006-10-31 13:08:24 · answer #3 · answered by Mariposa 7 · 2⤊ 0⤋
everything is detrimental to your credit score nowadays. all utilities (phone,gas,electric,cable...etc) in most states, if not paid, go to collection..if not taken care of then, they are put on all three credit reporting bureaus which will then affect buying a home,car and insurance on both.
Consumer credit(credit cards) is the worst type of credit out there... it is legalized loan sharking.
I'd say work on the credit cards first( they prob had or have the most interest)....cut up the cards...but DO NOT CLOSE THE ACCOUNTS....this will hurt your credit score more..then move onto your phone bill...then your student loans....hope this helps...good luck
2006-10-31 09:24:43 · answer #4 · answered by geekieintx 6 · 0⤊ 0⤋
Utilities are not generally reproted-- you are correct- -but COLLECTIONS will be on your report, whether its a parking ticket, utility, library book, etc.
If you do settle, see if they will report it as paid in full-- settling is also a ding.
Dont pay a collection by letting your credit card go late or your student loan. Work out a more manageable payment amount.
2006-10-31 09:23:35 · answer #5 · answered by Anonymous · 0⤊ 1⤋
Unfortunately, there are no easy or quick answers to this question. When you try and talk to your creditors reasonably, it just seems to make matters worse. And yes it will mess up your credit until they are all cleared up. Consider trying one of those credit counseling agencies, you pay one lump sum per month and the counseling service does the rest. Before you choose one though, be sure to do your homework and check them out thoroughly, so you don't end up deeper in the hole than you may be now. Best of luck to you.
2006-10-31 09:11:32 · answer #6 · answered by Anonymous · 0⤊ 0⤋
As soon as any kind of bill goes to collections it affects your credit score. No one thing showing negatively on your report is more important than the other, expect for in terms of dollars.
2006-10-31 09:10:49 · answer #7 · answered by Anonymous · 1⤊ 0⤋
that's not true.
any unpaid bill affects it.
You CAN continue to fix your credit, slowly but surely, but you need to work on it and make plans to pay back what you owe.
good luck and God bless you
2006-10-31 09:15:29 · answer #8 · answered by Wayne A 5 · 1⤊ 0⤋
sure does....pay off credit cards 1st.
2006-10-31 09:10:32 · answer #9 · answered by mstrywmn 7 · 0⤊ 1⤋
Yes, very much so!
2006-10-31 09:09:51 · answer #10 · answered by KoKo 3 · 2⤊ 0⤋