I have about $18,000 dollars worth of bad credit showing on my credit report. I am trying to build my score up as quickly as I can, and am about to have about $9,000 in hand to clear up some of that old debt.
Is your credit score based on the dollar value of your debt, or the number of individual debts reporting to the credit bureaus?
Thing is, I'm not familiar with what consitutes the figuring of a credit score. You see, out of the $18,000 of debt, only 3 of the individual debts exceed $2000 (one repossession alone that is around $8,000). In order to build my credit score up faster, is it better for me to take the $9,000 and pay off the smaller debts, or should I try to pay the bigger debts off first?
2007-08-02 09:08:52 · 8 answers · asked by Scott W 2 in Business & Finance ➔ Credit
Call the creditors involved and see if one they will take a lesser amount of payoff, (get rid of the additional fees) and if you can get in writing that if paid they will remove it from your credit report, if not it will only me marked as satisfied and remain on there for 7 years, after you pay them off.
2007-08-02 09:18:45 · answer #1 · answered by Pengy 7 · 0⤊ 0⤋
STOP!! Some of the advice you've been given is poor. Paying any of the debt without a written agreement to have them REMOVED from your credit reports is a bad move and will NOT help your credit score.
I highly recommend the book Credit After Bankruptcy by Stephen Snyder. You can probably find it at your library.
Paying anything without a written agreement to have the items removed from credit reports will not improve your credit score. In fact, the items will remain on your score for seven years from the last date of activity, which is when you made the payment.
Here is a sample letter from another web site
http://creditscoresystems.com/letters/creditor-letter-17.php
THAT is the way to go about it!
2007-08-03 02:46:57 · answer #2 · answered by dee 1 · 0⤊ 0⤋
Pay off the smaller one's completely and tell them to remove it from your credit report! They should send you a letter confirming that you have satisfied the debt that you can send to the credit bureaus to have it promptly removed. You may also want to try to dispute all the bad things on your report before hand because if they do not respond to the bureaus or show them proof of the debt being yours within 30 days, it is removed for being inaccurate.
The least amount of collections you have on your credit the better! Also, remember... if it is over 7 years old.... it should be removed!!
2007-08-02 10:00:23 · answer #3 · answered by supermansgirl199 2 · 0⤊ 0⤋
Excellent question. Your credit score is based partially on the total amount you owe vs. the total amount you could be in debt for. Ex. You have a credit card with a limit of $10,000 and you owe $2000 on it. $2000 is obviously the amount you owe and $10,000 is the amount you could be in debt for. If the amount on the you owe on that same card exceeded the limit that would be a negative strike against you.
You should pay off all credit cards that may be over their limit. Then you should pay off the highest interest rate cards. It doesn't really matter how much you have on each card because the total is still a ratio of what you owe to what you could owe as suggested above.
I have to applaud you in being aware of your credit score. You can get a free credit repair guide at http://www.your-credit-solution.com that can give you even more suggestions.
Good Luck! :-)
2007-08-02 10:10:20 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Pay off the small ones first. As another poster recommended, try to settle for a lesser amount. Get the settlement in writing and try to get an agreement to remove the negative from your credit report.
Fewer outstanding negatives is better for your score. But the most important thing is to pay all your current debt on time.
2007-08-02 09:48:07 · answer #5 · answered by bdancer222 7 · 0⤊ 0⤋
what i would do is first contact the agcy that houses this $18,000 debt to just inquire. i worked in a collection agcy, so more than likely you can settle the account with a settlement. and if you get that low settlement, then i would pay off some of my bigger accounts first. some times collection reps can settle an account without MGR approval. most collection agcy reps have to meet a goal each month for collection. so inquire about a settlement. dont let them know you are coming across 9 grand, but give them an amount that you think is reasonable. they will counteroffer your price, if you settle right then i would say you can let the account go for 4,000.00. if you do decide to go that route to settle the debt, whatever amt you settle for that is low, GET A SETTLEMENT OFFER LETTER. ask them to fax ltr. if they can email if possible. also what can have that debt taken off quicker is if you decide to settle the large debt, make sure the paymnt is by money order, money gram, western union. if you settle by check, credit card, or use debit, it can take 30 days to clear a payment. but in other words, ill settle my high debt, and if you have money left pay off some of the others.
2007-08-02 09:49:30 · answer #6 · answered by Tony E. 2 · 0⤊ 0⤋
You need to seek the advice of a debt counselor. Many areas provide this service free of charge. They can help by contacting the debtors for you.
Otherwise, you might want to contact the debtors and see if you can bargain with them to pay down the debt for less than you actually owe. Good for you for wanting to clear your record!
2007-08-02 09:18:46 · answer #7 · answered by Cheryl G 7 · 0⤊ 0⤋
well if you pay 9000 this will help your score and just keep paying and u should be fine
2007-08-02 09:21:12 · answer #8 · answered by shorty21 5 · 0⤊ 0⤋