Posted on: 16th Oct, 2007 10:18 am
i am trying to clean up my credit report and try to buy a house. I have a lot in collections from years ago when I was younger (and stupid). I have heard conflicting ideas on what to do. Some say that it won't do any good for your score to pay off collections, and others say it will. is it worth it to put in the money it will take to pay them all off? Will that help my credit score?
Hi Glynis,
I think it's important to keep the credit is good shape. It's not only about going for mortgage or personal loans or any credit card but one often gets denied for a job just because he or she doesn't have a sound credit record. This shows how important is it to have good credit. And, when it comes to disputing negative items in credit report, well, if it's done in a ethical way, one should try it out because that can give him a chance to improve his score.
I personally feel such issues should be discussed in this forums and Glynis, if people like you can help the community in getting a know-how of such credit issues, I think it will make a lot of sense to this community and help to clear lots of misconceptions about the industry as well as make people much more aware of what they are actually dealing with. At least, I would be glad to see Glynis discussing about such things in our forums and learn from him.
Thanks.
I think it's important to keep the credit is good shape. It's not only about going for mortgage or personal loans or any credit card but one often gets denied for a job just because he or she doesn't have a sound credit record. This shows how important is it to have good credit. And, when it comes to disputing negative items in credit report, well, if it's done in a ethical way, one should try it out because that can give him a chance to improve his score.
I personally feel such issues should be discussed in this forums and Glynis, if people like you can help the community in getting a know-how of such credit issues, I think it will make a lot of sense to this community and help to clear lots of misconceptions about the industry as well as make people much more aware of what they are actually dealing with. At least, I would be glad to see Glynis discussing about such things in our forums and learn from him.
Thanks.
As I have stated before it is your right to challenge anything on your report good or bad. But I would leave the good stuff alone (duh). My point is when you dispute something on your report you are not disputing whether you owe the money or not you are disputing whether the bureaus have all the facts to report it on your bureau and in my opinion 99% of the time they cant and will not take the time to document the negative. Thus its your right to have it removed. Its that simple. The bureaus are in it for the money only and dont give a hoot whether they hurt or help you. They are complelled by law to be able to backup anything you challenge with documentation or remove it.
Glynis, I understand but someone has to start, isn't it so?
So, why don't you start sharing your thoughts on such credit issues which you feel people don't know about and it may be of great help to them.
What's say?
So, why don't you start sharing your thoughts on such credit issues which you feel people don't know about and it may be of great help to them.
What's say?
I thought that was what I was doing.
Glynis knows what's he's talking about. As you should with any company do your investigating. See if they have compliants, see if they offer your money back, don't pay with money orders or cash... it's a scam!
Credit history accounts for 15% of your score. If you pay off a collection you have now lost the histroy of the account even if it's reporting negivtly. If you can settle the debt and get a delection letter it would be in your best interest. I know from experince the removal of derogatory items improves your score. If you want to waste thousand of dollars of high interest rates go fo it! A credit repair specialis is only looking to help you improve your livihood!
It's funny that mortgage professionals are so against credit repair! We should be working hand in hand to help people not loose thier homes. We should help our clients save money with lower interest rates, and we should always make sure to put our clients first!
Credit history accounts for 15% of your score. If you pay off a collection you have now lost the histroy of the account even if it's reporting negivtly. If you can settle the debt and get a delection letter it would be in your best interest. I know from experince the removal of derogatory items improves your score. If you want to waste thousand of dollars of high interest rates go fo it! A credit repair specialis is only looking to help you improve your livihood!
It's funny that mortgage professionals are so against credit repair! We should be working hand in hand to help people not loose thier homes. We should help our clients save money with lower interest rates, and we should always make sure to put our clients first!
i work extensively with my clients in trying to repair their credit, providing them with specific methods to help them deal with creditors, collectors and the like. i advocate, if they are trying to purchase a home, that they settle with as many collectors as possible. i also contact them later on to see how they are doing, to encourage them, to ensure that they have all the information they need. this i do all for free.
in addition to that, when the time comes for them to actually apply for the loan to purchase their home, i make sure that i offer them the best product, best rate, best scenario so that they are not wasting additional money.
as for mortgage professionals being against credit repair...that is not the case...it is the credit repair companies that we rail against; those who charge exhorbitant fees for someone to do what could have been done from the privacy of one's own home for free.
'nuf said
in addition to that, when the time comes for them to actually apply for the loan to purchase their home, i make sure that i offer them the best product, best rate, best scenario so that they are not wasting additional money.
as for mortgage professionals being against credit repair...that is not the case...it is the credit repair companies that we rail against; those who charge exhorbitant fees for someone to do what could have been done from the privacy of one's own home for free.
'nuf said
Yeah for Donna. She is exactly right. When you pay a collection you open the door for it to stay on your credit report 7 more years as a paid collection and it lowers your score for 7 more years. Everyone should read Section 611 of the Fair Credit Reporting Act. Then challenge all your negatives.
_________________
Glynis Shaw
Where are you getting this information? According to the law you account should only stay on your credit report 180days + 7yrs. Making a payment doesnt initiate a new term. You maybe referring to the 'states statute of limitations'. If you make a small payment to a collection account...you can restart the statute of limitations. This doesnt apply to credit reporting.
Look on your personal credit report....and see if you have any negative items.
I had a medical debt that was opened in 2001 and sent to collections. After fighting with the the insurance company...they finally sent me a settlement..and it was paid in 2003. ON MY CREDIT REPORT IT EVEN SAYS THAT 'THIS ITEM WILL BE REMOVED IN AUG 2008'.
A lot of credit repair companies like to lie about this...so they can 'scare' the clients into disputing it over and over again. (which cost money)
I didnt dispute this collection debt even though it's reporting wrong.....I dont care it's coming out this year. I paid in 2003.
When you view your experian report online...you can see it there.
The removal date is right under the credit item.
I know this also to be true...as I already had another medical debt removed a few months ago. Both of them were paid...and both of them were from different creditors.
_________________
Glynis Shaw
Where are you getting this information? According to the law you account should only stay on your credit report 180days + 7yrs. Making a payment doesnt initiate a new term. You maybe referring to the 'states statute of limitations'. If you make a small payment to a collection account...you can restart the statute of limitations. This doesnt apply to credit reporting.
Look on your personal credit report....and see if you have any negative items.
I had a medical debt that was opened in 2001 and sent to collections. After fighting with the the insurance company...they finally sent me a settlement..and it was paid in 2003. ON MY CREDIT REPORT IT EVEN SAYS THAT 'THIS ITEM WILL BE REMOVED IN AUG 2008'.
A lot of credit repair companies like to lie about this...so they can 'scare' the clients into disputing it over and over again. (which cost money)
I didnt dispute this collection debt even though it's reporting wrong.....I dont care it's coming out this year. I paid in 2003.
When you view your experian report online...you can see it there.
The removal date is right under the credit item.
I know this also to be true...as I already had another medical debt removed a few months ago. Both of them were paid...and both of them were from different creditors.
Banker0679 is correct. The negative collections will stay on the credit report for 7 years from the date of the original debt regardless if it was paid. unpaid, or even transfered to another party.
Hi CB...
The ethical thing to do is to pay them off of course. You could offer settlements to the creditors you owe and settle for pennies on the dollar possibly. But, sadly, this will not improve your score. Here is the scoop on doing "credit repair" yourself:
Have you pulled your credit? If not go to this website: www.annualcreditreport.com This is where consumers can go for 1 free credit report every year from each of the bureaus. When you pull your credit, the inquiry will not affect your score, if you let a lender pull your report the inquiry will go against your score. Go to that site and follow the directions, when you come to the page where it shows the bureaus - Equifax, Experian & Transunion, CHECK MARK ALL 3. You will go to each website one at a time, be prepared to print your report from each- you also have the option to be able to return & view your report for 30 days as well. If they lock you out, just call the bureau for assistance (number will be provided). Write down the confirmation number given to you with each report, you will need this to dispute the collections, duplicates, and mistakes on your report. You can click on each collection or negative account and choose "other" under reasons for dispute & type into the explanation box that you would like the account reverified at once. Do this for every collection or derogatory account - they have 30 days to investigate & you will receive an updated copy of your report showing the outcome, if they cannot verify the info, they will delete it and chances are some of this info will be deleted from the bureaus which will enhance your credit score. Do this for each bureau. Once you are done on one bureau, then return to annualcreditreport.com's site (you will see the option at the top of the screen), once back at the original site, you can then go on to the next bureau's site and so on, you get the picture - right? Or go to each site, print your report and type each bureau a form letter asking them to reverify the accounts and if they cannot be reverified to please delete them and send you an updated copy of your credit report. If you choose this option, be sure to include the confirmation # of the report, each account name and number you want reverified, your name, address, SS#. The address for correspondence will be listed on each of the reports & be sure to address the letter ATTN: DISPUTES. Check your reports for duplicate collections & mistakes - many times there will be duplicates which are dragging down your score - this happens as collections get passed around to different agencies. Request any duplicates also be deleted. Voila! You are on the road to credit repair - takes time, patience and a little know how.
Remember to maximize you scores -
*pay your payments before or on time,
*keep any outstanding balances 30% or less of the credit limits (some accounts this will not be possible of course),
*don't obtain credit from "finance" companies and
*don't let lenders pull your credit until you are ready to get a loan - this is why you pull your credit yourself. One inquiry can drop your score between 3 - 12 pts! Yikes!
Let me know if you have any questions at all - happy to help you on your way to great credit! :D
The ethical thing to do is to pay them off of course. You could offer settlements to the creditors you owe and settle for pennies on the dollar possibly. But, sadly, this will not improve your score. Here is the scoop on doing "credit repair" yourself:
Have you pulled your credit? If not go to this website: www.annualcreditreport.com This is where consumers can go for 1 free credit report every year from each of the bureaus. When you pull your credit, the inquiry will not affect your score, if you let a lender pull your report the inquiry will go against your score. Go to that site and follow the directions, when you come to the page where it shows the bureaus - Equifax, Experian & Transunion, CHECK MARK ALL 3. You will go to each website one at a time, be prepared to print your report from each- you also have the option to be able to return & view your report for 30 days as well. If they lock you out, just call the bureau for assistance (number will be provided). Write down the confirmation number given to you with each report, you will need this to dispute the collections, duplicates, and mistakes on your report. You can click on each collection or negative account and choose "other" under reasons for dispute & type into the explanation box that you would like the account reverified at once. Do this for every collection or derogatory account - they have 30 days to investigate & you will receive an updated copy of your report showing the outcome, if they cannot verify the info, they will delete it and chances are some of this info will be deleted from the bureaus which will enhance your credit score. Do this for each bureau. Once you are done on one bureau, then return to annualcreditreport.com's site (you will see the option at the top of the screen), once back at the original site, you can then go on to the next bureau's site and so on, you get the picture - right? Or go to each site, print your report and type each bureau a form letter asking them to reverify the accounts and if they cannot be reverified to please delete them and send you an updated copy of your credit report. If you choose this option, be sure to include the confirmation # of the report, each account name and number you want reverified, your name, address, SS#. The address for correspondence will be listed on each of the reports & be sure to address the letter ATTN: DISPUTES. Check your reports for duplicate collections & mistakes - many times there will be duplicates which are dragging down your score - this happens as collections get passed around to different agencies. Request any duplicates also be deleted. Voila! You are on the road to credit repair - takes time, patience and a little know how.
Remember to maximize you scores -
*pay your payments before or on time,
*keep any outstanding balances 30% or less of the credit limits (some accounts this will not be possible of course),
*don't obtain credit from "finance" companies and
*don't let lenders pull your credit until you are ready to get a loan - this is why you pull your credit yourself. One inquiry can drop your score between 3 - 12 pts! Yikes!
Let me know if you have any questions at all - happy to help you on your way to great credit! :D
Thanks for the advice on how to maximize your score. I don't carry high credit balances but I never kn ew about keeping outstanding balances 30% less than limits. What really amazed me is how much one inquiry can drop your score. Very good info here.
You need to keep your available credit at 30% or below, that shows your worth if you had to borrow.
That is something new that I learned here. I am glad to say mine are at least 30% and below.
I don't have any cards now, was shopping for one, but have chose to stop the efforts until my credit score comes up, I have found it a real pain, there are too many choices that want money to open accounts for people with not so good credit, maybe a year from now I will look and see what is out there.
Good idea. With a better credit score maybe you will be able to get a better rate. Hope it all works out for you. Think of it as no major deal.