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Dreamscar
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Subject: Need advice: $3200 in debt
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Sun Apr 26, 2009 4:31 am
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| My credit score is 541 as of October last year. I have 4 credit cards that I haven't paid anything on in 2 years: Best Buy, Capital One, Kohl's and Sunoco. All together they add up to approx. $3200 which really doesn't sound all that bad. After 2 years I am now finally able to start paying off my debt, but I don't know what to do. Some people said pay off the entire balance in one payment, starting with the card I owe the lowest, and some people said that it's better if I make monthly payments on them. So what would be the right thing to do? And once all my cards are paid off, do I close the accounts or keep them open? My cards are already cut up, so I won't be using them ever again. My goal is to get my own house next summer, which would mean I would have to raise my score about 100 points...is this possible to do within a year? |
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LT
Joined: 30 Jan 2009
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Posts: 64
2134 Magic Points
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Sun Apr 26, 2009 3:59 pm
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| If your credit cards are still with the original creditor thats great. If they are with collection companies, first ask them to validate the debt, then if you are wanting to pay them off, write them asking for a settlement and a pay for deletion. They will give you the settlement but the pay for deletion may be harder to get. More information is needed to answer your question fully. I have in the last four month cleared up over $3000 f debt and had 5 collection companies removed from my credit report.I ahve also managed to get one original creditor to erase the charge off. |
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carol
Joined: 27 Jun 2006
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Posts: 1308
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Mon Apr 27, 2009 7:45 am
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Yes, raising your score by 100 points within a year is not at all difficult if you can improve your credit history within the year and remove at least some of the negative listings from your report through pay for deletion agreement. If the debt is still with the OC, then you can negotiate with the OC and get it removed through PFD. But if it is sold to a CA, and both CA and OC listing gets reported in your report, then you can only get the CA listing removed and not the OC listing.
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fireyone
Joined: 26 Feb 2008
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Mon Apr 27, 2009 10:32 am
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I would imagine you are going to have to pay off the full amounts. Is the amounts you listed from a recent statement or what you think you owed when you last paid. If you have not paid on these debts for over two years interest and other fees could accumulate causing debts to skyrocket in the amount owed.
Now if the OC (original creditor) still holds the debt you may be able to settle these debts for less. They would rather work with you and recover most of their money then sell to a collection agency for pennies on the dollar. |
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Dreamscar
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Tue Apr 28, 2009 4:55 pm
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| Yes, all 4 credit card debts are currently under collection agencies. And by the amount I owe, I went by what the last statement from the agency stated. Thank you for all the advice. I'm going to start with the cards I owe the least on and pay off the full amount. Hopefully by paying all 4 cards off, then my credit score will be over 600 by the end of the year. |
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Mary
Joined: 06 Jul 2006
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Posts: 730
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Wed Apr 29, 2009 8:12 am
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Hi Dreamscar
If the cards have already been sent to collections, then they might have been reported in your credit report as delinquent accounts. Although the credit score will not improve much even after you pay them off in full, it will definitely save you from judgment which the creditor may bring against you if you do not pay it off. So paying off the cc debt one by one will definitely save your score from falling further.
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Where there's a will, there's a way !! |
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LT
Joined: 30 Jan 2009
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Posts: 64
2134 Magic Points
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Wed Apr 29, 2009 5:04 pm
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| Dreamscar Since your accounts are with collection companies, I would first send a validation letter and cease communication to them. I would then if you are able, one by one send a pay for deletion letter in exchange for a full or partial payment. Use some of the sample letters on this site. You look at all your options before you even contact this people. REMEMBER THEY ARE NOT YOUR FRIENDS. They only wnat money no matter what they say. Good luck, I've fought and cleared alot of old debt and stopped all calls. |
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fireyone
Joined: 26 Feb 2008
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Posts: 4124
1011 Magic Points
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Thu Apr 30, 2009 10:52 am
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| Dreamscar, Lt is right I would definatelty send debt validation by certified mail. There may be a chance they do not have proper proof of the debt to collect it. Alot of these agencies buy debt by bulk and never get the proper paperwork making it legal for them to collect. Be sure you send by certified mail so that you can prove you sent for validation. Now if they do validate you can ask for a debt settlement which may be less than you owe and also there is pay for delete. Sne those certified validation letters back and then let us know so we can help you from there. |
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