I got a saxophone back in December. now the payments are a little over 250 a month. back about four months ago I lost my job and have been looking ever since. I missed the past four months on the payments. What I wanted to know is... if I used some of the money from my student loan (I'm going to be a music major) to pay it off... will it still hurt my credit score? the saxophone is 16 months same as cash.
or really.. what is the best thing I can do?
2007-07-29 19:36:34 · 4 answers · asked by bluefyrefusion 2 in Business & Finance ➔ Credit
Your goal is to not allow your delinquent account to go into collection. Once it's in collection it will show up on your credit report if not paid immediately.
The first step would be to communicate with the company you purchased the saxophone with. Let them know your situation, and ask them to allow you to make reduced payments, or tell them the date you will be able to pay it off with your student loan.
It's best to handle it with the company/store you brought it from. Most companies will work with you because it costs them money to hand your account over to a collection agency. They are paying them to get you to make a payment. That's why many collection agencies can be so aggressive. They get paid based on their performance, and sometimes a percentage when you pay.
If for some reason the company or store refuses, and they turn your account over for collection. Most collection agencies report to the credit bureaus every month, sometimes 3 months.
So now you must try to work out a payment with the collection agency, or inform them of when you will be able to pay. In that situation they will work with you because they want to get paid, but at the same time you do risk it being listed on your credit report at least once, so you want to really try and work something out with the store you brought it from.
Draft a letter if you can't go in person, let them know that you are a student and Music is your major (this will show it wasn't just a frivolous purchase, you really needed it). Tell them you lost your job. Tell them when you will be able to pay. If for some reason you can't pay in full, pay as much as you can and then try to set up a payment plan.
At the end of the day, all companies want is their money with the least hassle. They know that some people can choose to just ignore it and not care about their credit score. When this happens they lose money. By having to go through a collection agency, administrative cost and maybe even judgment fees.
So they are really open to working with someone that will not put them through this and shows effort. Good Luck!!
2007-07-29 20:10:11 · answer #1 · answered by Just Saying 2 · 0⤊ 0⤋
Slow payment and late payment will sometimes show on your credit report and affect your score. But that's a heck of a lot better than defaulting on a loan. And it won't remain on your report for as long. Also, the 16 months same as cash probably applies ONLY if you make the payments on time. There could be a provision for them to now go back and assess interest. I would say go ahead and pay it off if you are able to, especially as it is a necessary expense for your area of study.
2007-07-30 02:46:51 · answer #2 · answered by Tom K 7 · 1⤊ 0⤋
I don't know about the student loan stuff but I do know for absolutely sure that calling the store that u bought the instrument in is crucial to your credit rating. Not calling to explain, could go really much worse. Creditors don't want the hassle of taking the stuff back and would most likely work with you on your pmt plan.
2007-07-30 03:26:16 · answer #3 · answered by tink 3 · 0⤊ 0⤋
Talk to the loan company
2007-07-30 02:45:46 · answer #4 · answered by Leo 7 · 0⤊ 0⤋