What's the best way to clean up credit, if most of the accounts are with collection agencies?

Question

I have some accounts that are with collection agencies. I want to pay them off, but I don't know if I should go through a Consumer Credit place or to do it on my own.

Answer 1

First. You did not get into this situation over a week or month, so it will take some time, patience and persistance to get things cleared up. But you can do it.
First thing, to FTC.gov and pull your credit report. See what is on there.
Anything that is related to agreements and payments must be in writting from you and the other parties. Read previous sentance as many times as needed. The first time you pay a bill and then get a call from another collection agency a month later for the same bill, and they say they have no record of your payment.....
Also you will need to send some things certifed mail. Keep all your paperwork and make clear simple notes of the steps you take, dates and times, phone numbers and who you spoke with.
If you have a checking account, keep copies of cancelled checks.
You need documentation so that when you make an agreement and keep it and the account is not listed as paid on your credit report, you send the credit reporting agency a dipute with copies of you documentation.
Start out with an offer to the original creditor. Tell them you can pay half the bill, but they have to agree to remove the collection item from your credit report. If they agree in writing, great. Try to pay the orginal creditor directly, just because they usually are better about documenting the agreement to consider the account either paid in full or settled.

Answer 2

keep in mind that consumer credit counseling reports on your credit report and can cause problems too.

Here is the simplest way - plan the work and work the plan.

Start with the newest collection accounts (you will need a copy of your credit reports to determine that and you need all three experian, equifax and trans union, since they all receive different information). I say this because the newest items have the most impact on your scores. You can go to Fico.com and access all three for your free credit reports.

Then go from least amount to largest amount and start calling. Your goal is to negotiate a smaller payoff amount than what is due. You want them to accept a smaller payoff, but you also want them to report it paid off in full. If they say they will take a lesser amount but report it as paid for lesser amount, it is still better than not paid at all.

You will stay motivated if you can see progress (why you go from smallest to largest). And another way to stay motivated is to keep a big debt tally. Start off with how much you owe and then start subtracting as you negotiate down and pay stuff off. If you start out with 5k in debt and can show visible progress to yourself each month, it is very motivating!

Good luck!

Answer 3

Try credit repair first. Credit counselling looks like a chapter 13 bankruptcy to most lenders. . Usually companies charge hundreds of dollars to simply pull your credit and send correctly worded dispute letters—this is the key…..people will tell you that you can do this yourself for free but the truth of the matter is that the credit bureaus will throw your letters away or simply reject them. There is an easy to use online kit that will deliver the results you want available for just $19.95 at the source website. A similar kit is being sold via infomercials and radio talk shows for seventy dollars more but they try to solicit you repeatedly for other services after the fact.

Answer 4

depends on what kind of accounts....if its credit cards, you might think of calling consumer credit, you might be able to save some money/settle in full....if its dr. bills/hospital, I'd try to pay on my own...are you sure the collection agencies are reporting to the credit bureau???...they might not be yet....I'd check that also.....we've had some stuff at collection agencies, and almost all of them were willing to take 1/2 or part of the money we owed....
I'm pretty sure if you go thru consumer credit, you can't get new credit cards for a while......

good luck :)

Answer 5

My experience in debt management has given me an insight into this area. We had a debt mamagement team who negotiated with the creditors and managed to reduced the total owed by agreeing a lower settlement figure. Although they did charge the fee, the savings made by them made it incredibly worthwhile to our clients. The creditors tended to just try and fob off individuals but having experts working on your behalf is well worth it.