Credit repair solutions... Help!?

Question

After going through a divorce almost 4 years ago, I stopped paying on at least 4 or 5 credit cards. I've never paid a dime since, and they have killed my credit.

If I offer a settlement with each one individually, what are the chances they will accept? What percent of the original debt would be good offer?

Also, if they accept the settlement, will it be removed from my credit, and my rating go back up? The damage has already been done, so I really don't want to go this route if it is not going to help. In a few years it should be gone from my report anyway, I think.

Any suggestions/advice will be greatly appreciated as I realize this was one of the worst mistakes I ever made in my life.

Are there any good credit/debt internet forums out there?

Answer 1

I used to work for a credit repair company and can offer you some suggestions.

1) DO NOT offer them a settlement. If you have not made payment in 4-5 years, they are considered old trade lines and are not affecting your credit rating at this point as much as you might think. If you offer them a settlement, you will verify the negative account, thus bringing it to current negative status instead of old.

2) Pull your credit and make sure you pull a tri-merge report. This gives you information from all 3 bureas (TransUnion, Experian and Equifax). You will likely see duplicates b/c if company A can't collect from you after 6 months or so, they sell your account to company B. Then if company B can't, they sell it to company C. So, you may have the same debt listed on there, as negative, 3 times.

3) Begin disputing ALL negative items on your report. Do some "googling" and find terminology for disputing negative accounts. Bureaus have 30 days to investigate your dispute and deem it valid or invalid. If the companies can't verify things, then they have to remove it from your credit report. Now, this isn't to say that 6 months later they can't put it back on there if it is valid, but for something 4 or 5 years old, it's highly unlikely. And keep in mind, once an item on your report is 7 years old, you can request it be removed.

4) Begin rebuilding your credit. Get a secured credit card. NEVER have more than 1/3 of your limit charged on it. And don't immediately pay it off. Example: You get a $300 secured card. Charge $100 on it. When the bill comes, pay $50 and the next month, pay the rest. Continue doing this for about 4-6 months and you will see a great improvement in your score. If you can afford to get 2 or 3 secured cards, even better.

Feel free to contact me if you have questions!

Answer 2

First to answer your questions. Generally creditors will accept anywhere from 40%-80% of the debt. But this is dependent on several factors such as how old the debt is and how fast you can pay it off. The older the debt and faster you can pay them the more they will knock off.

The question is SHOULD you make a settlement offer. First there is something called the Statute of Limitations, this is the period of time creditors can legally take action to get you to pay. This varies by state and is 2-6 years from the date of the last delinquency. If you are past that they can no longer force you to pay through the courts. The second is the 7 year reporting period. Once 7 years has passed from your date of last delinquency it can no longer be reported on your credit report.

Now, if you are in these periods still and want to take care of the debts the best thing to do is offer to pay it in full IF they remove the collection account. They generally will not do this if you settle for a lesser amount. When you send the offer through certified mail make sure to include the amount you will pay, the dates, and that they need to remove the collection account. DO NOT send any money to them until you have a written agreement from them that they accept the offer.

If you just do a settlement and the collection account remains on your report your score will not improve much. But if you can get them to remove it, it will be like the collection never happened and will improve your score.

Answer 3

I have been to "many" different credit repair sites on the web. Some were pretty good and some were pretty bad. I refuse to use a websitemy rights and using them.Don't pay for information that you can find for free.

Answer 4

You need to check out this video on how to increase your credit score by using a 100% legal loophole. Here is the video URL: http://www.creditscoresecret.org

I was able to get to 595 from 489 in just one day and from 489 to 748 in just a few week; that's pretty fast in my book. Good luck!

Answer 5

Your best way out is to go to a credit counseling company. Pick a good one and a Christian one is even better since you know they will be offering emotional help as well. They will combine your debts into one payment that you pay them and they will contact all your credit card companies and make the payments to them for you. They automatically negotiate lower interest rates and fix the problem between you and the credit card people. All the credit card people want is their money. They will take it what ever way they can get it. Something to remember that may not work for you since you stopped payments for so long, is that if you go through a situation where you cannot make full payments on something, if you pay something regularly every month, they cannot take you to court, they have to accept the payment. It keeps the door open better for keeping you out of hot water and for negotiations between you and them. The situation you are in now though is better taken care of by a credit counselor who by the way also takes doctor bills, etc and puts them all in the pot. We got completely out of debt that way. We were paying over $1000 a month to all the people we owed and most of it was going to interest penalties and it would have taken us over 25 years to pay them all off. When we went with the credit company, our payments dropped to $600 due to the credit company getting the majoriety of the interest taken off and combining all the debt with us paying them that $600 and most of that money was going to the premium. We were out of debt in 5 years. One thing though, if you go with a credit counselor, you will not be able to charge a thing on any credit card anywhere or take out a loan until you are out of debt. They do make allowances for emergencies sometimes for a loan sometimes but you have to go through them so that they know why and what it is for. If they do not ok it, you will be dropped and have to pay all your credit companies the regular way. We got a loan approved because our van was in an accident and the replacement value wasn't enough to get another one. They approved that. Also working with them, will help your credit score increase alot better because you get out of debt on good credit and faster which works well with credit bureaus.

Answer 6

Get any and all agreements in writing. Your history won't change, but it will age off.