What is the best way to repair credit if you can't get any credit because of the bad history?

Question

I have really, really, really bad credit anything you can think of. I want to repair it but I noticed almost all of it will be cleared up from my credit report in 3yrs any ways. Should I continue and neglect the payments and wait the 3yrs or should I try to pay them. It's been about 4-5 yrs since I last paid my creditors. Some have told me to just wait because even if I did pay back all the creditors my credit report would still show that I was past due for so long. I should just hang and wait for the 3yrs and I'll be good to go.

Answer 1

If you have bad credit and you still have debt - it is not going to go away. However said three years is wrong. Most information stay on for seven years and it is ongoing. Meaning as long as you owe money and you're not paying it it will keep being reported negatively.

The best way to repair your credit is to pay at least the minimum due each month. The more you pay the better. Once you pay long enough your credit score will rise though maybe slowly.

If you have major debts and have problems making any payments - then talk to a credit counselor and see if you can do some debt consolidation.

I went through a company called ByDesign - which worked great for me. I live in Los Angeles.

Check your local BBB for a rating of the credit consolidator. If any company demands a major amount of money up front to help you out (more than $100) don't even bother with them. They also should not charge you more than a very moderate monthly processing fee if any.

At no point should you ever and I mean ever agree not to pay on time so that they can make a deal with the credit card company. That will give you very negative credit ratings.

Always make sure to stay on top of the payments and make sure that the credit consolidating company is making the monthly payments on time.

Answer 2

The credit reporting agencies rely on the information given to them by your creditors. Creditors just want to get their money and by now they have written off your debt as a lost cause. If you contact them and try to pay them something, say fifty cents on the dollar then they will be willing to work with you.

Before you do anything though you should consult a Consumer Credit Counseling service. You can find some at this Google search: http://www.google.com/search?sourceid=navclient&aq=t&ie=UTF-8&rls=GGLR,GGLR:2006-49,GGLR:en&q=consumer+credit+counseling+service

Most of them offer free advice and work to help you. If you have a large debt then you could wait the 3-4 years for them to be cleared off your credit history. It takes 7-9 years to clean your credit report of old credit history (good or bad).

I had to declare bankruptcy so I know about bad credit. I still have to live down my credit rating because I have bankruptcy on it, but two years after declaring bankruptcy I was able to get a credit card (yes it is at a high interest rate). I have been building up a good credit history every since by paying more than the minimum payment and making each and every payment on time. I have gotten my credit score over 600, which is only fair, but a lot better than what it used to be.

Other ways to repair your credit are to make sure that things get reported. The Credit Reporting Agencies only calculate your credit on things that they have been told. Order a free copy of your credit report (you can do that once a year) and then see if there are things that you can disprove or add. Also update your addresses and other personal information. If you have credit then you sign a commitment to pay it off. If you rent or pay a mortgage then you are doing the same thing. Rarely does your rent get reported. If you have a good record with your apartment company then you might want to report that. Putting an item on lay-away and paying it off on time is another thing that you can report. However, if you pay for a service once a month with no long term contract then that will not count, because you can cancel that contract easily. You can't cancel your rent contract so easily so that could help your credit rating.

If you make an attempt to pay off your past debts then that can be weighed against your past due payments in evaluating your credit. Talk with a credit counselor for more information.

Answer 3

Unless those creditors are still contacting you for payment, don't send them a dime or it will record your payments and start the seven year reporting from "last transaction date." The odds are they have already written you off if they are not chasing you for payment; however, don't dismiss the fact that they won't still try to collect from you. Instead of sending them payments why not open a savings or investment plan over the next 3 years to build up a cushion and work with cash instead of credit? You can have a nice head start on a down payment for something you want or need in the future. You should also consider getting a secured credit card to build up current credit for when those other debts fall off your record. When those debts are off your record, you will at least have one credit card showing 3 years of current and good credit but don't max it out. Use it for history purposes.

Answer 4

Better would be to declare bankruptcy, in the 3 years you could already have a good credit score. Most banks will give you a home loan 12 months out of bankruptcy with no additional bad credit. But if you wait the three years you will still have a low credit score. Either way find some way of getting good credit. Get a secured credit card, get a cell phone (they will require a 300-400 dollar deposit) but both of these will report in good standing to the Credit agencies. If you don't file Bankruptcy you will have a long road ahead of you unless you pay off the debts.

Answer 5

That's a tough one. Will you need a decent credit report in the next three years to get a car, apartment, or job? Check out this website for more information as I'm in over my head:

http://www.bankrate.com/

Answer 6

3 yrs? where did you pull this myth out of? a box of cracker jack? and the myth that stuff wipes off after 7 yrs is a myth as well.

if you don't pay....it hurts you worse than anything else. to contineu to not pay just logs on the report how you still refuse to pay, even a few pennies.

what creditor would ever want to loan a person money that won't pay it back? none!!!!!!!!!!!!!!!!!!!!!!!!

items NEVER come off your credit report till you pay them off or have them removed by court.

pay your bills like everyone else....you are only hurting yourself. credit is like your GPA in school. real easy to go from an A to an F. REAL hard to go from an F to an A.

1. pay off all that you owe. even if its late it will show paid in full which shows maturity...just late payments alone shows being a child.

2. don't believe the 7 yr mark, things erase, I'll just let them be and they will get better, etc. its all false, all myth and you are only digging yourself in deeper and deeper every waking second with this thinking.

3. any items that are years old you might be able to protest them though the credit agency. since they are old, most companies won't go back into paperwork to prove yes or no on an old bill. this is one way to get old old stuff off.

but even doing that, it shows up that you protested it.

a credit report never erases....its like a time line of your life that follows you for life. every address, any name changes, SS#s, etc. EVERY THING IS ON THERE FOR LIFE.

credit should be your first item in life....no women, no cars, not going out, not even food. pay your bills first, on time, and then worry about the rest of life. as without that credit....you won't have a life much to live.

and don't do the bankrupcty avenue either. as those laws changed and you still have to pay it back...there is no more free write off and get away with it.

let alone a bankcrupty on a credit report is like the kiss of death to anyone that wants to loan to you.

Answer 7

you can always do some secured credit cards. Many report positive credit lines.