Credit Repair and Collection Accts
Date: Wed, 07/14/2010 - 07:12
I currently have 3 collection accounts (hard hits against my score, I know.) I'm working to issue pay for deletes on these accounts or settlement agreements with a "paid in full" tag. Are either of these options realistic?
My collection accts are:
Midstate Collection Solutions (tuition acct) for $331
Beacon Services (credit card) for $630
Cavalry Portfolio Services (HSBC credit card) for $1844.21 (I'm not sure if this one is listed on my credit report yet... as of May it wasn't.)
I realize that the collection accounts take a huge hit on my score. If I am able to see these accounts removed in a PFD or settlement with a PIF tag, will I see my score go up at all? I also realize that by paying off these accts, my "debt" will be reduced... does that imporve my score?
I have 2 other credit cards that have been charged off, each with balances of $200. Those will be paid off in August, thus reducing my debt again.
I have an old utility account for $372 that hasn't been sent to collections but still shows a balance. That will be paid off by September, reducing my debt.
I have two installment loans out right now with World Finance Corp and Security Finance, for a total of $800. Those will each be paid by the end of the year.
(I am moving in December and want to have all of my collections and reported debts on my credit file to be paid off.)
Paying off all of the collections accts, charged off credit cards and other outstanding debt will bring my debt down by $3300.
After paying all of that off, the only other debt reported on my credit report will be my student loans (1) $13,000 and making monthly payments, (2) $3138 and in deferrment, (3) $23,000 from US Dept of Education and in deferrment. I realize that is still almost $40,000 in debt from student loans.
Aside from my student loans, will paying off my other outstanding debts reported on my credit file increase my score? I am looking into getting a secured card through Orchard Bank and charging my gas, then paying it off every month so that I am making on-time payments to some type of account.
I read online that the best credit files are those with 4-6 credit card accounts in good standing and never missing a payment, and some type of installment account. After paying off my current debts by the end of the year, I would like to use one credit card for the next 2 years to show on time payments every month and no balance.
Is this a reasonable plan? Will I see improvement in my score over the next 2 years if I stick to this plan?
Paying on defaulted or collection accounts will do nothing to in
Paying on defaulted or collection accounts will do nothing to increase your score. Try for the pay for deletes althought the tuition account is not likely to delete.
It's good to see that you've chalked out a payment plan to pay o
It's good to see that you've chalked out a payment plan to pay off your debts completely. But, since many of your accounts are with collection agencies, paying them off may not improve your score much. You should negotiate to get the accounts removed from your credit report after you've paid them off. Although, agreeing to a 'Pay for Delete' totally depends on the creditors.
The tuition account that you've will be difficult to be removed from your report. If the loan is a Federal-backed one, you can consider the William D. Ford Loan Consolidation program. It will help you to rehabilitate your loan by making your new payments on time. After about 12 months, your loan will be considered rehabilitated and you credit score will improve.
The best option to improve your score will be to remove the accounts from your report and start clean making payments regularly. It may help you to improve your score substantially.
