I had a credit card whose balance balooned to $3900 (the limit was $2500 initially but ballooned to this amt after i missed payments, over the limits, etc.), it was subsequently sent to a collection company who hired a lawyer to collect the fees. I received a summons by a sherriff deputy a few days ago. I contacted the lawyer and worked out a payment schedule (as i cannot pay the $3900 lump sum). They told me that since i could not pay the $3900 as a lump sum, i would have a judgement placed on my credit report, even though i'm actively paying off the debt to them, and when it is paid off it will be marked as paid on my credit report. This debt is my fault and i realize i let it go way too long. I have worked hard to increase my credit score from the rock bottom up to almost 600, all this before I got this judgement. How bad will my score be affected from this, and will i ever be able to get a home loan with this judgement on here? I am paying it off now.
2007-01-15 01:45:42 · 3 answers · asked by ukfan1976 1 in Business & Finance ➔ Credit
I know that the judgement will stay on your report for 10 years. However, if you pay it off within those 10 years it will show on your credit report that you are paying on it or that it is paid off. It drops your credit score because it shows that you have been forced to pay a debt. As far as how much it drops your credit score, that all depends on how much you owed and just how late you were in paying.
In answer to your getting a home loan, if your credit score is around the 650 mark, you will get a home loan, but keep in mind that the lower your credit score, the higher your interest rate will be. With a credit score below 600, you will definitely not get a home loan unless you go through a finance company that specializes in high risk financing. However, you will pay an even higher interest rate by going through one of those companies.
What I would suggest is that you do your best to keep that judgement from going on your credit rating. Do whatever you can to stop that.
I wish you luck in all you do.
2007-01-15 02:27:39 · answer #1 · answered by dollfacedbaby1 3 · 0⤊ 0⤋
Whoa, back up there partner!
You are making payment? And he's still threatening to take you to court?
Have you made at lease 3 such payments to him?
You need to double check your state laws, but in most states once you have established a payment routine (or better yet signed an agreement) the you have what in legal terms is called a "contract volation". That means that the previous contract is now superseded by your new payment agreement. As long as continue to make those payments you are not in violation of the contract and they can not sue you yet.
You don't want a judgment on your records, it could very well effect a major loan. It will certainly drop your credit score enough to cost you a lot of extra interest.
Research your local laws and decide how to proceed. If this were my situation, (keeping in mind I know my state laws) I would let him try to sue me, then counter sue for damages to my credit. In the meantime keep paying whatever you have been, and keep your records. Keep all letters that you sent/received from him. and try to establish some sort of agreement on what your monthly payments are.
2007-01-15 04:41:37 · answer #2 · answered by Anonymous · 0⤊ 0⤋
You will still be able to get a home loan with that credit score. However, the mortgage approval amount may be lower and the interest rate on your mortgage higher. It will be good that your report is showing that you are paying the debt off. You can check out these 2 sites for info. on loans and info. on a company that handles credit repair. Sounds like you are on the right track. Good luck!
http://loan.divinfo.com/
http://www.jdoqocy.com/click-1886335-10293256
2007-01-15 02:48:46 · answer #3 · answered by Reenie 3 · 0⤊ 1⤋