CREDIT QUESTION! i have several accounts that have gone into collection!?

Question

i have several accounts that have gone into collection. I want to increase my credit score, but ive heard that making a payment on something that is already in collectsion wont do much to boost your credit score since the account is already in collections. is this true? please help

Answer 1

Hi,
I own a credit repair agency ( one that's legal and not out to rip off innocent consumers ). Although there are a lot of scams out there, some companies that assist in credit repair are legitimate and really do help. Email me @ [e-mail] and I will be happy to give you some free advice. No cost, other than your time. I have seven years plus experience in the field of credit restoration and contrary to popular belief, you can revive your credit score even if the accounts are new in collections or charge offs. Whomever you choose to help you make sure that they are legal and will not have you doing anything illegal to magically fix your credit score. As a side note, there's a lot of stuff on the internet about establishing a new identity, applying for an EIN ( employment identification number or TIN ( tax identification number ) to use as a new social security number. This totally illegal and a lot of people are doing jail time for it. So please before you take measures to fix your credit issues make sure you thoroughly investigate the company and the procedures that they use. Hope this helps.

Answer 2

If your accounts have recently gone to collections and you have the ability to bring them current and keep the accounts open then that is what you need to do to start improving your credit and your FICO score. If the accounts have been charged off by the original creditor and sent to a collection agency then you need to do some more research.

Do you live in a state where the collection agency can sue you and garnish your wages? How long will it be before you want to buy a house? or obtain other credit? How long is the statute of limitations in your state for the type of accounts that were charged off? Do you have assets they can go after?

How you answer these questions will determine your best course of action. Good Luck

Answer 3

Your credit report will list any collection or charged-off accounts that you may have. Having these kind of accounts reporting will definitely have an adverse affect on your credit score. A word of caution though. Paying off collection accounts, especially older ones may cause your credit score to go down, at least in the very short term. If you are applying for a mortgage please consult with a mortgage professional such as myself before paying old collection accounts. If they are newr pay them down. If they are medical collections they are not really a huge negative and really will not drop your score much at all.

Answer 4

Your credit score has just dropped incredably.
It is based on your pay history. When advising someone on how to fix credit, I tell them to pay off new collections first. This is important. By paying off collections that are less then 6 months old, you will be bringing the credit score upto 30 points EACH COLLECTION! After you get the collections paid off, start wacking down your limits on current cards. Do not close any account. by paying down credit cards to half or under, you will be increasing your score again.

Answer 5

Yes, that is true. The only two ways to raise your score are 1) paying your bills on time and 2) reducing your debt ratio.
Other than that, there is nothing that will raise your score - not even paying off collections.
That is not to say, though that you should ignore them. If you have the means to pay them outright or at least settle, do! Paid collections always look much better to potential lenders than open collections just sitting there. After you have your collections cleared, concentrate on getting current and staying current with your other bills.

Answer 6

The first thing to do is forget about your credit score. Your history is probably already full of slow pays. What is great though is when that idiot in a cubicle calls and says "we will ruin your credit" you can fire back "go ahead it's trashed already. But if you want to talk about this like adults I will be happy to."
The next problem is running your life and making decisions based on what it will do to your credit score. Make decisions to increase the security in your life. Get out your budget. Pay your mortgage or rent, utilities, food, car insurance first. Because once you have your roof, food, and transportation in secured life gets less scary. After that start working you way out of debt.

Answer 7

Most of these answers are terrible!

First, learn the facts.

1) As long as collections stay on your credit report they will hurt your score.

2) As negative items get older on your report, they lose importance, and your score will slightly improve. If you pay off an old debt, it turns the status to "recent" and it will actually HURT your score, not improve it.

3) If you pay off a collection account, all the creditor is required to do is show "paid" on your account, but all information about late payments, collections and charge-off's will remain, and those notes HURT your score.

4) Negative items stay on your credit history for 7 years, beginning from the date of the delinquency. NOT the charge off date....NOT the date they reported it to the credit burear. This is very important, and you need to verify exactly what this date is. Most collection agents lie about it on your reports.

Therefore, here is what you need to do if you want to fix your credit.

1) Start by disputing every item on your credit report, and send each creditor a "demand to validate" the debt. If they do not respond, or send inadequate validation information, they must delete it from your account. This information must included all contracts, bills, receipts, and everything they used to calculate exactly what they claim you owe.

Many old debts are not validated because they can not locate your records. Others are ignored because the creditor does not want to mess around searching for these records.

This method will usually remove some of your negative items from your credit history.

2) Prioritize your creditors. Those that are 5-7 years old are most likely over the statute of limitations, and also close to the date when the credit bureau must delete them automatically from your report. Ignore those completely.

3) Negotiate with the creditors for a reduced settlement. But demand that in exchange for payment, they must agree IN WRITING to DELETE the negative items from your credit history. Yes they can do this. It's not against the law or against any TOS agreement with the credit bureaus (I've investigated this a lot...trust me. It's not there).

If they refuse to do this, don't pay it. Remember, you are trying to fix your credit. It is silly to pay off a debt and still have the negative information on your credit report hurting you. If they won't help you out, ignore them.

Finally, work from the other end to fix your credit...do things that are designed to improve it. Pay your current bills, try to get some low limit credit cards to establish some good lines of credit history. Go to http://www.lifeafterbankruptcy.com and view their last two newsletters, as they contain lots of useful hints on improving your credit.

Remember...everything in writing! Do not believe anything a collection agent tells you. And don't waste money on credit repair agencies, as they will do exactly what you can do yourself.

Answer 8

You won't be able to reestablish your credit until like 7 yrs AFTER they are all paid off!! Most times they let you buy it out for a smaller amount up front. Like if you owe $7000, they'd let you close it out if you gave them $3500 today.