How screwed is my credit?

Question

I stopped paying my credit card in college (yes, I was young and stupid) and when I wanted to pay it the fees were so high I couldn't. It ended up in a collection agency which i have paid only 100 bucks so far because I am unemployed at the moment. Now they are threatening to have a judgement placed against me. I only owe like 600 bucks though. Is my credit completely ruined? I am worried. I do want to pay my debt, it is just imposssible right now. I am paying all my loans on time and my other credit card on time.

Answer 1

Well, it's not the end of the world. But it would definitely help your cause if you made SOME kind of arrangement to take care of it. Even if it was $5 a week, that's $20 a month. They may even be gracious enough to stop charging interest. Since they're threatening to file a judgement against you, make arrangements with them, because if they file and they win, it's going to stay on your credit for up to 10 years.

Answer 2

Impossible? or your not living like a poor person to pay it all off. This is why credit scores exist you need to know what you can afford before you commit yourself to those expenses. Lenders have a right to know you didn't hold up your end of the deal. They don't care how old you are. Guess what if you don't hold up your end of the deal they get rich off you eventually in fees and interest.

I'd say cut up both cards, leave the accounts open. They will aqquire good credit history if you don't use them. Or hide them if you get a finance fee for not using them once a year.

Reguardless of what you went to college for - get a job any old job will do. (I know this is hard to do)

Only buy the basics. You need to set up goals for yourself now to have a future without debt. Credit degrades the value of you money when you pay interest. Wouldn't it be nice if you could have a savings account that paid you interest every month. Think about it when you get this straightened out.

Hang in there you can pay, You just need to look a little harder. Worst case, borrow that 600 from mom, dad, sister, etc and pay them back asap plus 3% interest for believing in you. You must know someone with 600 or 3 people with 200 or 12 people who will loan you 50 bucks for 6 months. At least these small personal loans will not affect your credit score. Really Worst case Prosper.com you can get 600 but this will show on your report.(higher interest than 3%)

Answer 3

It may be for a little while but if you PAY it back and get a card where youi are paying the payments on time with ... well you should re establish CREDIT in no time. Or if you do not want to use credit cards anymore then maybe you will be bale to get a MORTGAGE(house or apartment) if you have some "down payment money"(probably above teh normal amount since you have the BCR)and start paying that off and then your credit will grow when it is shown you can be trusted to pay the monthly payments on time

Answer 4

well, I can tell you that it's not 'helping' your credit.

Having anything related to collections on you credit report hurts your score, plus makes future creditors weary about lending to you.

If you are in close contact with the agency and work out a payment plan that will work, it shouldn't negatively affect your credit any more than it already has. Just make it a priority to pay this debt off sooner than later.

You should always pay off debts in this order:
Debts with collection agencies (the faster you pay it off, the sooner it will be removed from your history)
Debts with the highest interest, then down to the lowest.

Answer 5

Your credit is probably going to be in bad shape for awhile. The only advice I can give would be to pay them off as soon as possible, or if you need a higher credit score immediately you can attempt to have your credit card limits raised.

Because your credit score takes into account the amount of debt you have proportional to the credit card limit, if you have a higher limit the same amount of debt doesn't look as bad. However, you must resist the urge to take advantage of that extra room because if you do you will only be hurting yourself even more.

Answer 6

Basically yes it is screwed... at least for a few years.
I kinda did the same thing in college. I was making $9 an hour but needed to be paying out $15 in bills. It sucked.
They can take you to court. I was served from a few collectors. I avoided court by borrowing money from my parents and just paying them all off. A few months later my score statrted to go up.
Your paying on the new stuff on time will help you out but its best to pay the past stuff. A lot of the time you can call and they will agree to accept 50-75% and mark it paid in full. See if you can do that. Untill you pay them your score wont go up much. It sucsk they have so much control.

Answer 7

Credit is never completely ruined... but for the time being, it is going to be in bad shape. You keep paying everything else on time, and it will help a bunch, but until you get this credit card settled and move on, it will weigh your credit down considerably. Unfortunately, it is always easier to hurt your credit than it is to build it. Hang in there and get this taken care of, though, and you'll start moving up again. Good luck!

Answer 8

First of all, $600 is hardly cause for a civil action, but it is also not enough for you to be so worked up over. If a good portion of that is fees and interest, you might be able to talk them into decreasing it. Offer a settlement in full, a lump sum. $300-350 should do it. Make sure you get everything in writing that the collector promises you, though. And document EVERYTHING.

Answer 9

A judgement will show on your credit report and is much worse for you than slow payment.

However, for $600, they are just making threats. It will cost them more to take you to court. They will end up charging it off (meaning they no longer are actively trying to collect it). That also shows up on your credit report.

Answer 10

you have received some good advice already and i will add that if you are sending this company just five bucks a month and they are accepting it, they cannot legally take you into court for a judgment. Most collection companies only threaten this anyway, they use fear to get you to pay up.