Basic Questions from a credit repair newbie.

Submitted by BubbaPuck on Fri, 04/25/2008 - 22:59

These are some basic questions hopefully some of you can help with. I am very new and need to improve my credit. I use to get my 3 scores and credit report.

1) In the "Collection Accounts: Accounts seriously past due" I have a couple of "derogatory" accounts that have small balances. The dates are a few years old. Should I pay these off or leave the balances on and wait it out. I have heard that if I pay it off, it will be 7 years from the point I pay it off befoire it goes off my credit report.

2) I have a derogatory account from a collection agency that is the third party from on old utility bill. Iss it better to pay the utility company of the third party collection agency.

3) Mywife has a few really old accounts that are open that she never uses and didnt even know they were still open. Should she close them or just leave them open?

4) I have about 10 students loans. Last year, for some reason they close the old accounts and opened new ones with a new account number. Now It looks like Ihave 10 closed student loans and 10 open ones. Doesnt that make my credit worse having so many accounts. Isnt there something I can do? I didnt tell them to close them and reopen them all.

5) I dontt have a credit card now and I know I need to use one responsibily to improve my credit. My wife can get me one through her credit card company (authorized on her acount) and I think my credit is good enough to get a capital one card. Should I get 2 right away or get 1 and wait a few months?

Thaks for all the help... Bubba

Let me Try to answer a few of these.

1) Try to attempt a pay for delete for these accounts. Make sure you get documentation from the CA if they agree to a pay for delete.

2) Contact the utility company. If they agree to take the payments then go for it. If you have to work with the CA then try settling the debt after negotiating for the right amount that you CAN pay or try a pay for delete is possible.

3) Check your wife's credit report. If these accounts are adding to the good credit history and keeping her score good then dont have to close these accounts. Just let them stay.

5) If you do want to get a credit card then take one. Too many credit application too frequently lowers your score and hurts your credit rating.

Hope this was of some help Bubba.

PS: I have tried to answer the questions point wise.

Sat, 04/26/2008 - 07:28 Permalink

Laura is very right in telling you to get documentation if they agree with the pay for delete. I have seen others tell stories of the creditor offering to do this and once they pay the bill they never do.

Sun, 04/27/2008 - 01:15 Permalink

1) False. 7 years from date of for delete might work for you.

2) You could pay the utility, if they still own the debt.

3) If retail cards, close them...if regular MC/Visa CCs, I'd leave open (unless she has plenty of current available credit cards w/ history).

4) Are the student loans in default? Do the closed student loans show a balance due? If the answer to both of these questions is "no" then I suspect your score benefits from this.

5) Get the joint account with your spouse, and open your own card. If you get hit with two inquiries, the effect on your score is only temporary (six months to a year).

Sun, 04/27/2008 - 15:40 Permalink

yep...good advice from above. Some OTHER good advice I have is this. Try NOT to let the Student Loans go into 'default' ( speaking from personal experience)'s almost impossible to get back to a 'positive' status. If this happens, the IRS CAN take it out every year, if you expect refunds. Thought I'd put my '2 cents' in.

Tue, 04/29/2008 - 17:32 Permalink