I was sent to collections 5 years ago and now I am buying a house.?

Question

I was sent to collections 5 years ago on 3 credit cards when I was 18 yrs old. Now I am trying to buy a house and those 3 items items are coming back to haunt me. Is there a way I can get those cleared up before I buy my house. They only total $300, but I have no idea how to pay them.

Answer 1

Since you want to buy the house now, I guess waiting 2 more years for those items to drop off your credit report (delinquent accounts can be reported for 7 years only) isn't an option.

So this is what you do, contact the collection agency, I suggest all contact be conducted in writing between yourself and the collection agency, and say you are willing to pay the debt only if they delete the account from whatever credit bureaus they are reporting to. Send all letters of correspondence to the CA via USPS registerd certified return mail and remember, get the agreement in writing before you send them any money! Stay off the phone, most consumers are at a disadvantage when they negotiate over the phone with a collection agency. There is no rule that requires you to talk to a collection agent.

Visit the website creditboards.com, it has a "pay for deletion" letter, a validation of debt letter and within those letters you can require that the collection agency contact you in writing only. I suggest conducting some further research about credit issues while you are there. Some collection agencies may be hesitant to delete the entry, but I assure you, they have power to delete the derogatory item, you just have to be persistant. Another reason why you should try to get the collection agency to delete the entry from your report, is because paying off an old debt hurts your credit score. A paid debt is just as bad as unpaid debt. Weird isn't it? A consumer who wants to pay off an old debt is rewarded by having their FICO score lowered.

Answer 2

Usually the credit reports have the phone numbers to the agency who's requesting the money..whether it's the credit card company or collection agency. If a number isn't listed, look up the credit card company or agency on the internet and find the number.

Your bank will require them all to be paid in full before they'll give you a mortgage...at least mine did. Also, if it's been 5 years, collections will almost always take a settlement payment...some is always better than none. Keep a record of who you talked to, when and what they said and keep all your paperwork from the communication you've had with them, faxes or whatever...until you've closed on your house, maybe even a little longer..just to make sure they won't come back and say you never paid.

A lot of times, they'll say they'll remove the report from your credit history, but they don't..so it never hurts to keep the paperwork showing where it was paid.

My husband's credit was atrocious so they would only give us a 20 yr. loan. The interest wasn't too bad but they told us as long as our credit was clean for a year, we could refinance for 30 years. It dropped our payment by over $200 a month and our interest by 2%. That first year was rough, but we made it....and he owed a LOT more money than $300!! Good Luck!

Answer 3

You have a couple options. The first one is what I would go with. I would recommend consulting a trusted mortgage broker. They will pull your credit (this will cost you, but it should be the only thing you pay them until you actually go under contract to buy a home). They will identify the companies that have posted collections to your credit and will know how to get in touch with them to pay them off. If you are truly interested in buying a home, any mortgage broker should be more than happy to help you complete this first step, of course assuming you will use them to help you finance the purchase of your first home. Which is why I suggested a trusted broker.

OR If you have a copy of your credit report showing the 3 credit bureaus, it should list the companies that posted the collections to your credit. You should see contact info listed on there, if not, at least you will know the name of the collection agency, you can google them, find their contact info, call and have them look up the collection by referencing the account number on your credit report. Before you give them your social, just make sure that they can pull your account and tell you enough info for you to know that you haven't call some random illegitimate place. This is the only reason why having a mortgage broker help you is a little more comforting, they know most of these places and know what to look for. Anywhoo, after you have determined that they are indeed the place holding your collection, ask them to send you a statement or invoice for the collection. While you are on the phone with them, ask how long they wait to remove the collection from your credit. I have had some removed, others change the status and leave it there. You never know until you ask and bug them to death.

If you can avoid 'settling' or doing a 'charge off' avoid it. Pay the amount you owe each company in full, because it will harm your credit a lot less. And one last thing, do not confuse mortgage brokers with credit counselers. DO NOT get credit counseling...it ruins your credit even worse, no matter what they say. A mortgage broker is there to arrange financing for your home, which sometimes means repairing credit first, and most should be willing to hold your hand through that process because they want your business.

Also, you probably could get a mortgage right now. Your interest rate will be higher, but being in real estate, I have seen people fresh out of bankruptcy purchase a home. It is getting harder as sub-prime lenders are struggling and going out of business (lenders that help people with credit issue basically) but in any case, any mortgage broker should be able to inform you of your options.

Hope this helps. Sorry it is so long, I could go on, but best of luck to you!

Answer 4

I've been working lately on trying to clear up my credit. You can get one annual report for free from each of the credit bureaus. However, you might want to go to truecredit.com or a place like that and pay about $15 a month to get unlimited reports from all three bureaus. At the bottom of the report, you will see the names, addresses and phone numbers of each of your creditors. Pay each of them. Then complain to each of the credit bureaus that the information is inaccurate. In most cases, the information will get corrected on your credit report within about 60 days or so. I've occasionally have a bureau remove the entire collection from my account as if it never happened. I think that was a mistake on their part. I think that the reason this happened is that the company sent the debt to a creditor.

Several years later, I paid the original company. Then, I complained that the stuff on my report was an error and said I paid the original company. When contacted, the creditor probably said I still owed it as far as they knew, but the company said I had paid it. So, the bureau thought it was a mistake and deleted it altogether. I think I was just lucky on this.

Yes, even after you pay them off, they will still show up on your credit report for many years. But, it is better to have them payed off because then they show up as derogatory information instead of delinquencies.

I have raised my credit score about 30-50 points (depending on which bureau ) in the last 6 months by doing this stuff. I still have a little ways to go. But there are only a few things that are wrong that are left.

Answer 5

They are open? Your credit report has the information on who has them now, it is not likely the original debt.

They will haunt you for another 7 years after you pay them off. They will show paid, but seriously late.

If you have any charge offs those look even worse.

You messed up and will be paying for it for a long time yet, in the form of high interest, but you should be able to get a loan.

Answer 6

you're actually not in cost for the debts of your companion formerly you won married. The criminal policies do selection by using each and every state so teach your self regarding the law first. in view that the debt remains on her credit report, ask for the specifics regarding the interior maximum loan like the formed quantity of the interior maximum loan, payments made, if a default judgment became as quickly as entered. Ask the corporation to deliver you written data approximately this debt. I surmise that they'll now not have the documentation think approximately asked. traditionally, besides the fact that if that's a debt that became as quickly as written off and later offered by using a secondary series corporation, you're actually not obligated. This series corporation is making hollow threats to intimidate you to pay off the interior maximum loan. a lot of those secondary communities are a scam. They purchase the unpaid loans on the secondary marketplace for pennies on the dollar. So besides the fact that they recoup from you is money of their pocket. they are actually not allowed by using law to threaten you. this is in opposition to the regulation. No good producer might permit you recognize that think approximately easiest sometime to pay an historic debt. they are actually not waiting to threaten to take your house. valid agencies be sure a fee plan. Write a letter to the lawyer elementary on your state and checklist the abuse.