ok i turned 18 and got a credit card... didnt pay it off, and with a few other things now i have nothing but BAD credit, well i ran my credit report everything is legit.... 5 bad things totaling up to about 1500usd first if i pay these off will it make a diffrence.... they are all going off my credit in 1-2 years, the reason i am asking is that i can not handle renting any longer i need to buy a house, so what are some things i can do to improve this.....
2007-06-30 19:45:28 · 9 answers · asked by Jessica B 2 in Business & Finance ➔ Credit
with the renting thing, im actually paying 1200 in rent, why pay that much for a nice house when i can buy one... i just want somthing i can call my own.. my house my yard that i can do as i wish with it. i know i cant buy right now, i just want to know what to do so that i can work up to buying. should i make payments on my debits or pay them at once.. and do i ask them to take it off my credit.. i hae never heard of that before
2007-06-30 20:02:04 · update #1
When you say the items are coming off in 1-2 years, is it because the debts were incurred 5 or 6 years ago?
Yes, pay the debt off as quickly as possible. In the meantime, to begin rebuilding your credit apply for a secured credit card. You can spend 20-30% of that, but pay it back the following month. Or leave a 5 dollar balance. This will re-establish a positive "trade line" and rebuild your score. After a few months, get a second secured card and repeat the process. In 12- 18 months you will be able to have these cards unsecured...plus you will have a much improved credit score.
Even after paying off your debt, it remains on your credit report for 7 years from the time it was filed. It will say: Account Status- Paid Collection
That it is why it is very important to establish a positive payment history with the secured cards.
http://www.creditboards.com/forums/
2007-06-30 19:51:02 · answer #1 · answered by >Golden Ticket< 4 · 0⤊ 0⤋
You need to pay your debt, then take copies are fax them to the credit burear yourself, this should show they are paid, and will help when you purchase a home. You can also buy on a contract of deed, means you pay like rent, but title of house does not go into your name until the house is paid off in full. Or you can do the rent to own thing. The quicker you pay off the bad debts, the better for your credit rating, slow pay looks bad too. Get it done now, buy the time you want to apply for credit for home, it should be okay.
2007-07-01 03:47:16 · answer #2 · answered by Anonymous · 0⤊ 0⤋
My advice pay off what you have in bad debt first before you even think about laying down money for a home. First off you will be tagged with a huge interest rate because of the negative credit. Secondly, you will only be making the situation worse if you don't pay them off. Fees will rise and then you will owe even more. Pay off the debt first. Petition to have all bad debt removed once its paid off. Sometimes it can take two or three times but it can change the way your credit report reads. when you check your credit always run a FICA score check at the same time to see how your score is looking. This will be what determines your interest rate. Good luck...and stay away from credit cards...don't do what I did and wait till it gets to 90k.
2007-07-01 02:51:37 · answer #3 · answered by Cho Chi Girl 2 · 0⤊ 0⤋
The link Golden Ticket posted is an excellent site and you might do some reading on there.
Unless you request deletion upon payment it will not only show as a paid "negative" it will also update the account to make it look newer than it actually is. (updating is not re-aging) Which will hurt your scores.
Never speak to collectors on the phone. Do everything in writing. Never sign your letters to them, print your initials or type your name. Every thing you send to them should be sent certified mail return receipt.
Check the collecting SOL for your state. If you are out of SOL you do have a legal right to inform them of that fact and not pay OR you can use that fact to knock down the amount that you offer as "payment in full".
If you are past the collecting SOL you have a fairly good chance of them accepting far less since legally your offer to pay is the only way they would see any money off of it.
You should start out by ordering your paid reports from each CRA and updating your personal information.
Then you should send debt validation letters to the collectors. Make sure that the amount hasn't been illegally inflated, that they are licensed and/or bonded if your state requires it and that they have a legal right to collect on that debt. (collectors have been known to inflate amounts, not be licensed etc, and there have been times where collectors do not even have a legal right to collect - but they still try)
When you get the green card back from sending the debt, send disputes to the CRA's for any inaccurate information the collectors are reporting (inaccurate reporting is fairly common with collectors)
When the collectors properly validate, and you want to pay, you should send a pay for delete letter.
Request that they take a portion of the amount as "payment in full" AND that they will delete everything from your reports upon payment.
How much you request to pay depends on if you are out of the collecting SOL, how old the accounts are, etc.
Never send a payment until you have it in writing from them (with their signature) that they will consider it paid in full and that they will delete.
(if you do not have that in writing, you may find another collector trying to collect on the same debt regardless if you pay in full or only pay a portion - yes it happens) Keep that paper "forever" (no I'm not kidding)
Never pay by personal check. Pay by money order or cashiers check.
Again, you might go to the link that Golden Ticket posted, click on Forums, and do some reading.
2007-07-01 03:36:13 · answer #4 · answered by echo 7 · 0⤊ 0⤋
Banks will over look 1 thing, but 5 is a pattern they don't like to see and will look down on it. With this in mind do what you can to clean it up(payoff or settled is better than wrote off) then keep a close watch on your credit when it is cleared up then apply for a loan, you will have a better chance then, but don't apply with all that still on your record.
2007-07-05 01:15:53 · answer #5 · answered by book writer 6 · 0⤊ 0⤋
I dont think they are going off in 1-2 years. It takes 7-10 years for things that are PAID to come off your credit report. I have things on my credit report that have been paid off since 1998. Start paying your bills off. You are going to need that good credit later!
2007-07-01 02:54:35 · answer #6 · answered by SKITTLES 6 · 0⤊ 0⤋
You aren't going to be able to get a house without paying off that debt first. No bank will even consider giving you a loan. After it gets paid you will probobly have to wait around 2 months for your credit to be cleared again. Good Luck!
2007-07-01 02:49:47 · answer #7 · answered by ZERO 4 · 1⤊ 0⤋
What exactly do you mean you can't handle renting anymore so you are going to buy a house?
You think the finances are going to get more manageable by owning your own home?
In terms of taxes, a home is a tax shelter and gives you more leverage with tax deductions.
In terms of expenses, you have a mortgage, insurance, property taxes every Feb and Nov, alll utility expenses, maintenance expenses, etc....
So where exactly is your logic again?
2007-07-01 02:56:30 · answer #8 · answered by pxp608 4 · 0⤊ 0⤋
You need some SERIOUS credit counseling before you get worse off.
2007-07-01 15:34:42 · answer #9 · answered by jdkilp 7 · 0⤊ 1⤋