Hello All,
I just checked my credit report and I realized that my debt has escalated to more than 15k. Thank God now, I have that money available to pay off all of it. The problem is, I do not know which way is best for me to go. Should I pay all of them off once or will payment plans help better in improving my credit? What are the differences between these two options? Please let me know and thanks for reading.
No related posts.
Sun, Aug 1, 2010
August 1st, 2010 at 9:49 am
Сredit repair workеd fine to fix my credit. They disputed and removed lots of bad items from my credit report. I used this service – buildcredit.ifastnet.com
August 1st, 2010 at 9:49 am
Pay it all at once.
August 1st, 2010 at 9:49 am
Is this debt that has completely defaulted or is this current debt?
If this is $15K in defaulted debt, then you could really stir up trouble if you start renewing contact with debt collectors over paying it back.
- Getting on a monthly payment plan for already defaulted debts will not reactivate your accounts and give you good credit again.
- The way to pay off defaulted debts is to settle them up front…Get all terms of any settlement FIRST, then pay with a USPS money order. Offer to settle each account for 25% and go from there. This way the debts are resolved.
- Paying back defaulted credit card accounts will not improve your credit rating. When a credit card defaults, this is called a charge off and this notation will stay on your credit report for 7 years….even if you later pay the debt back in full.
August 1st, 2010 at 9:49 am
Pay it all off in cash, don’t use another card. When you have paid it all off, close the A/C, cut up the credit card, and just get and use a debit card, as you obviously don’t know how to handle money.
August 1st, 2010 at 9:49 am
Depends on the type of credit it is.
If you have credit card balances, pay them off all at once. Whenever you pay off a significant amount of unsecured debt, like credit card or line of credit debt, your credit score increases drastically.
If they are installment loans, paying them in full doesn’t make your score jump. It is better to continue making payments based on terms to allow these accounts to age as long as possible. And then use the rest for savings. People need savings for emergencies.
And if the accounts are in collections, also use payment plans because the damage has been done and cannot be reversed. And because the damage is done, why bother paying more than you have to during a single time period.
August 1st, 2010 at 9:49 am
If the debt has hit your credit report and is being reported as a negative item, such as a delinquent account then just paying it off isn’t going to get it removed. It will stay on your history for around 7 years, hurting your score the whole time.
You’re going to have to engage in what is generally called "credit repair" to clean up your credit history and negotiation with these debtors.
The good news is, you can repair your own credit! Everything a credit repair agency or lawyer can do to repair your credit, you can do yourself. Find a good credit repair guide, and get to work!
I used the one at http://howtofixyourcreditscore.info and it really worked for me. It came with sample letters I could use to make payment arrangements with the debtors and file disputes with the credit bureau.
The best part is, it also taught me how credit scores work, and what I can do to raise my score. It really saved my credit.
The basics of Credit Repair go something like this:
Every year you are entitled to one free copy of your credit report from each of the major bureaus. You should order your free report from http://www.annualcreditreport.com and check for inaccuracies.
Dispute the inaccuracies directly with the credit bureau, and according to the Fair Credit Reporting Act they have to verify the item. If the reporting company doesn’t respond in 30 days, or sufficiently prove the item should be there, it will be removed, which should raise your credit score.
If the item comes back verified, you’ll have a chance to contact the reporting party and try to negotiate a settlement or payment.
For items you did not dispute, you can be proactive and contact the debtor listed on your credit report. Look into requesting a "Pay For Delete" where you’ll settle for a percentage, or pay the whole debt and they’ll remove the listing from your credit report.
"Pay For Delete" is very important, because if you just pay the debt the creditor can continue to list it as a delinquent account, which will keep hurting your score.
This "Pay For Delete" setup is exactly what you need in your situation to make sure that your credit history gets cleaned up after paying the debts.
Lastly, look into ways to build "positive" credit to keep your credit history fresh and growing.
Good luck!
August 2nd, 2010 at 6:55 pm
Please help support our sponsors
Click on their ads, they are legit and can give you free expert advice
They will give you a free evaluation
Please visit my other sites
http://www.howtostophairloss.net
http://www.ultimatehairlosstips.com
http://www.high-technology-market.com