For someone that works with credit?

Question

I recently checked my credit, and I had some deliquent medical bills. I am now paying 75 on a month on all the deliquent accounts. I have two questions.

1. Is it true that if I pay them, that it DOESN'T raise my score? My friends are telling me that it doesn't matter anymore, since they are deliquent anyways.

2. Are there any credit cards out that don't charge outrageous start-up fees or deposits? Even if the rate is super-high, and the limit is really low, I would be interested, I just don't want to pay hundreds in fees.

Thanks for your time.

Answer 1

1. Making payments doesn't always raise your score. If you pay it religiously it might go up but not much...it would have to be awhile. Like a Credit Card, it should come off after 7 years.
2. Orchard Bank is a good one. I am using that one to repair my credit and they aren't outrageous at all. Have had them over 2 years and they took off the annual fee for me because I never was late making a payment. Repairing your credit score won't happen over night...takes alot of effort and patience!

Answer 2

1) This is correct and in fact the scores will be negatively impacted if this agency reports the activity monthly. It updates the report and is considered by the system to be negative activity. Yes...you are making good on a debt and should be rewarded. However, the system sees it as a negaitive account that now has current activity. The faster you pay it the faster the scores will return to normal. I never suggest that a person ignore their debt but a little side note...mortage lenders typically disregard medical collections.

2) Yes there are but if you aren't getting them in the mail by the hundreds you probably do not qualify. The collection accounts would prevent you from seeing them.

I write a blog on the subject of credit management, mortgages, real estate trends, etc. Check it out for more information that may be helpful.

Answer 3

Hey guys! Try answering question 1 again, but correctly this time. And two of you are pros?

NO, paying off your debt does NOT raise your score. Why? Because your credit history will still reflect late payments, charge-offs and delinquencies. Sure, it may now show "paid" but it will also have all that negative information in it.

But it didn't do anything for your score. Sure, people like Roosterkroozer won't be calling you a dead-beat now, and now you are broke with poor credit. But what have you accomplished?

You need to contact these creditors and demand that they delete these negative items IN WRITING before you pay them any more money. Yes, they can delete the negative items. Yes, they will tell you they can't, or it's against the law.

Ask them to point out where in the law it says that? They can't because it doesn't exist!

All they want to do hurt you by destroying your credit. They don't care about you, they just want their money.

That is the key to your fighting with them. If they want their money they have to give you something in return...your credit score!

Answer 4

Don't listen to your friends. Most of them are probably delinquent themselves. Now I counsel many of my clients that have credit issues. What you want to do is pay those delinquencies that are showing on your credit history that the report date is no more than 2 years old. For instance, Medical Bill 1 was reported on June 2001. It is now November 2006. I won't touch that bill. But Bill 2 is reported as of November 2005. You want to pay that one. On collection accounts you want to make a settlement with the debt collector by 50% of what you owe. This takes away most fees.

As for credit cards that don't have alot of outrageous start up fees or deposits. Go into the supermarket or drug stores that sell the pre-paid Mastercards. As long as you keep the card current with deposits to recharge the card every month or 2 months they will report to all 3 bureaus good credit and won't report it as a secured card. They are the only ones that I know of. Otherwise, most want you to deposit $300 into an account or have high start up fees.

Answer 5

First, thanks for not being a "dead-beat." That will, over time, keep your score from going down farther, so it does, indeed, help your score. You can request the medical people who reported your credit to report the payments on a regular schedule again. That is all you can hope for.

As for the credit cards, stay away from them. Get a mastercard- or visa-based debit card instead. No interest, no bills, no debt. Plus, the card will be good at any ATM. I have my paychecks direct deposited on mine, and I can do the same things as a regular credit card does, only without the usurious high fees and interest (up to 27% on some cards) rates. No hassles, no problem!

Answer 6

well, you say that your bill was delinquent? if you let your account slip into 180 days being delinquent, then your card will charge off and you will get an R9 on your credit rating, which means you can't buy a house loan or a car loan or anything. it takes 7 years to get it back in good standings. if the 75 bucks a month is more than your minimum payment then you are AOK:)