Paying off debt
Date: Tue, 09/12/2006 - 19:42
My husband has some debt that has been charged off/sent to collections. We've managed to pay all of it off, but I just have a few questions for all you who know a little bit more about this than we do.
1. There are some debts that are listed a few times. Once under the original creditor, once under a collection agency, and maybe another time under another collection agency. What should we do about this? Should we contact each company and inform them that the debt has been settled? Or does paying it off with one agency automatically take the debt off his report?
2. After paying off a debt and we receive a recepit/letter stating that the balance has been paid in full, do we need to contact the credit bureaus of this in order to have it changed on our report? Or will the collection agency take care of this?
3. Once all of this is settled and our debts show as paid on our report, what is the best way to build his credit back up? I've heard that signing up for a secured credit card from our bank is a good way. If so, how long will it take if we use it and pay it off on a regular basis for our credit score to go up? What's the average length of time?
4. I have no credit history, but our apartment, bills, etc, is in my name. We are interested in buying a house within the next 6 months or so, if possible. Will mortgage companies take our rent payment history into consideration? We've been renting for a total of 3 years under my name and have paid rent every month on time. But as far as credit cards, loans, etc, I have nothing in my name. We would like to purchase a home as soon as we can qualify. With my husband's "not-so-great" credit history and my "no credit history, but good rental/bill payment history," will that be enough for us to get qualified?
Thanks a bunch for the time and help! Be praying for us as we try to settle these debts and purchase a home for our family. Thanks! :D
1. There are some debts that are listed a few times. Once under the original creditor, once under a collection agency, and maybe another time under another collection agency. What should we do about this? Should we contact each company and inform them that the debt has been settled? Or does paying it off with one agency automatically take the debt off his report?
2. After paying off a debt and we receive a recepit/letter stating that the balance has been paid in full, do we need to contact the credit bureaus of this in order to have it changed on our report? Or will the collection agency take care of this?
3. Once all of this is settled and our debts show as paid on our report, what is the best way to build his credit back up? I've heard that signing up for a secured credit card from our bank is a good way. If so, how long will it take if we use it and pay it off on a regular basis for our credit score to go up? What's the average length of time?
4. I have no credit history, but our apartment, bills, etc, is in my name. We are interested in buying a house within the next 6 months or so, if possible. Will mortgage companies take our rent payment history into consideration? We've been renting for a total of 3 years under my name and have paid rent every month on time. But as far as credit cards, loans, etc, I have nothing in my name. We would like to purchase a home as soon as we can qualify. With my husband's "not-so-great" credit history and my "no credit history, but good rental/bill payment history," will that be enough for us to get qualified?
Thanks a bunch for the time and help! Be praying for us as we try to settle these debts and purchase a home for our family. Thanks! :D
Quote: There are some debts that are listed a few times. Once un
Quote:
There are some debts that are listed a few times. Once under the original creditor, once under a collection agency, and maybe another time under another collection agency. What should we do about this? Should we contact each company and inform them that the debt has been settled? Or does paying it off with one agency automatically take the debt off his report? |
Two collection agencies cannot report for the same account. The creditor has the right to hit the file along with the collection agency to which the debt was passed. It sounds that one collector hired another company for doing the collections. Two of them cannot report for the same account. Dispute the item with the credit bureau. They will investigate on your dispute and update your file.
Quote:
After paying off a debt and we receive a receipt/letter stating that the balance has been paid in full, do we need to contact the credit bureaus of this in order to have it changed on our report? Or will the collection agency take care of this? |
The receipt is the proof that the debt has been paid off. Keep this in safe place so that you can use it to challenge if the credit bureau or the collection agency contradicts your dispute.
Quote:
Once all of this is settled and our debts show as paid on our report, what is the best way to build his credit back up? I've heard that signing up for a secured credit card from our bank is a good way. If so, how long will it take if we use it and pay it off on a regular basis for our credit score to go up? What's the average length of time? |
You are right. Time will prove and the regular payments towards the secured card account will rebuild your credit in the future.
Quote:
I have no credit history, but our apartment, bills, etc, is in my name. We are interested in buying a house within the next 6 months or so, if possible. Will mortgage companies take our rent payment history into consideration? We've been renting for a total of 3 years under my name and have paid rent every month on time. But as far as credit cards, loans, etc, I have nothing in my name. We would like to purchase a home as soon as we can qualify. With my husband's "not-so-great" credit history and my "no credit history, but good rental/bill payment history," will that be enough for us to get qualified? |
The accounts that are seen in your credit file will decide your credit worthiness. If the rental payments are reported in your file, it is already doing good towards your credit. If they are not reported, concentrate towards those accounts that are in negative state. Once they are paid off, your credit profile will improve.
