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 reyore279
Joined: 09 Sep 2009
Posts: 2
1.59 Dollars($)
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 Posted: Wed Sep 09, 2009 11:52 am Post subject: Pay down credit cards or pay off collection accounts? |
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| Would it be better to pay down credit cards or pay off collection accounts? I don't have the money to do both so which one would you advise to do? I am trying to get ready to begin looking for a home to buy in the next 3 months and do not have enough money to do both. |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7448
Location: bloomfield, ct
70.12 Dollars($)
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| Posted: Wed Sep 09, 2009 11:58 am Post subject: |
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you are obviously best served to do both, but if you simply cannot, why not try a combination?
in trying to obtain a mortgage these days, you'll find that lenders are more often seeking payoff of all collections/judgments, etc. in that sense, i think it makes more sense to get rid of those. you can reduce your card balances over time, hopefully.
i suppose you would prefer to pay the cards down, since nobody likes to pay collection accounts. if you choose that path, just be aware that a lender might just require payoff of your collections when you try to buy a home.
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George M. Akerley
Loan Consultant
860-221-5044 |
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reyore279
Joined: 09 Sep 2009
Posts: 2
1.59 Dollars($)
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| Posted: Wed Sep 09, 2009 12:32 pm Post subject: collections |
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| When I pay off collections should I ask the collection agency to trade my payment for them to remove the negative tradeline from my credit report? |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7448
Location: bloomfield, ct
70.12 Dollars($)
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| Posted: Wed Sep 09, 2009 12:35 pm Post subject: |
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not quite sure what you mean by "trade" but what you'll want to do is to ensure that you get receipts for your payments immediately (if you do debit card payments, that'll be easy), and direct guarantee that they'll update the credit report as soon as possible (usually within 30 days). they cannot remove the negative, but updating it with zero balance will be adequate.
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George M. Akerley
Loan Consultant
860-221-5044 |
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sunnyca2009
Joined: 04 Aug 2009
Posts: 1737
36.13 Dollars($)
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| Posted: Wed Sep 09, 2009 8:36 pm Post subject: |
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| clear yoru collection first and still keep making the ateastl the minimum on the credit cards and catch up on them afetr you clear your collection stuff |
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jheard
Moderator
Joined: 12 Dec 2007
Posts: 599
Location: Houston, TX
98.69 Dollars($)
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| Posted: Fri Sep 18, 2009 7:51 am Post subject: |
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If you pay off the collections in full, you can usually negotiate a reduced amount. For instance, if you owe $10,000, offer them $5,000. You can usually negotiate after that for a lower amount.
I would look at the interest rates on the various accounts and pay off the highest rates first.
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Disclaimer: This is not legal advice and I am not your lawyer. The information provided in this forum is for discussion purposes only, and is no substitute for an in-person consultation with an attorney who can analyze all of the facts and determine how your state and local laws may apply to your specific situation. |
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