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Member
destinylove
Posts: 8
Registered: ‎06-01-2007

Managing my credit/debt

Hello, I have been struggling with bad credit for about 8 years now every since college. My report consist of a ton of hospital bills, school loans, credit cards, and utility bills (other bills). I must admit that I was ignorant to how credit works when I went off to college and I haven't been able to bounce back. My fico score average is 518. I currently have a credit card I pay every month that reflects on my credit and I pay my school loan bill every month as well. I want to do more to work on my credit but I don't have the time with working full time, going to school full time and taking care of my four month daughter.  My mother tried to encourage me to do a bankruptcy because she did one about three years ago and is doing really well now. I'm trying to avoid that, but I simply need someone else to help me get this on track due to the lack of time. I have heard so many good things about Lexington law that I wanted to give it a try and see if they could help me, please tell me what you think.  Also the credit card that I have is a card that I received becuase of an outstanding balance I had with a creditor and I was offered the card to wipe out the debt if I pay it on time every month which I do. What else can I do to raise my credit score beside paying these two bills on time.
Senior Contributor
FretlessMayhem
Posts: 3,279
Registered: ‎08-03-2007

Re: Managing my credit/debt

I hired a credit repair company before discovering this website about a month ago. Right now they are doing their thing, but I can do everything they are doing for cheaper. If I would have known that at the time I could have saved myself $200, but for what it's worth they are getting things deleted.
 
Save the money, do it yourself.
Here we go again...
Contributor
JennLewis
Posts: 123
Registered: ‎05-14-2007

Re: Managing my credit/debt

Hi destinylove,
 
Regarding your credit repair questions
I don't have experience with Lexington Law - I'll let the others talk about them.  However, I have heard just as many bad things about Lexington Law as I heard good things.  From what I understand, all they do is have people (not necessarily attorneys) send debt validation letters and dispute letters.
 
The best scenario is to do the credit cleanup yourself because it's cheaper.   You can get sample letters from this forum and send them yourself certified mail return receipt requested for about $4.00/letter.  For example, if there is a debt that you want to pay, you can do a pay-for-delete letter, where you tell the creditor who owns your debt that you'll pay them if they delete the item from your report.  If there is a debt that you don't owe (for example: you owed Credit Card A $100, but they sold the debt to Collection Agency B, and Collection Agency B is reporting that you owe $1,000), you can send a debt validation letter.
 
Regarding your bankruptcy questions
As you may already know, the bankruptcy laws have changed dramatically since the time your mother filed for bankruptcy.   Even though you can still file for bankruptcy, you have to be stone broke to be able to discharge everything - most people have to file Chapter 13 bankruptcy, where you have to pay back your debts in a period of time.  Plus, it's on your credit report for 10 years.
 
Regarding bettering your credit
You're on the right track - do everything in your power to pay your bills on time every month.  As you pay your bills on time every month, your credit score improves.   
 
Because of your score, don't get any more credit for now.  You'll probably only qualify for sub-prime loans/cards, and from what I understand, FICO now counts that against you if you have a "consumer finance account" (translation: sub-prime) on your report. 
 
Another thing that you can do is get your hands on every spare dime that you can and pay off the credit card.   The lower you can get the balance, the better it will be for your credit score because your debt ratio will improve. 
 
Another thing to do - if you have the resources, negotiate pay-for-delete deals with the creditors who own your debt.  
 
Unfortunately, time is the best thing that's going to improve your score.   As time passes, your older debts don't count as much against your score as they do now, and after 7 years from the date of last activity, they fall off your report.
 
Summary
For your situation, I would talk to a bankruptcy attorney and review your financial situation with him/her.  Most bankruptcy attorneys provide a free consultation, and really good attorneys will sit with you and explain all of your scenarios (Can you file Chapter 7, or do you have to file Chapter 13? What will happen when you file Chapter 7 or 13? Are you better off not filing for bankruptcy and negotiating payoffs for the debt?).  If the attorney recommends debt negotiation, ask if s/he will help you with the validations and pay for delete, and if they will, ask how much do they charge? 
Regular Contributor
Rocket01
Posts: 226
Registered: ‎03-25-2007

Re: Managing my credit/debt

Hi Destiny,
I had LexingtonLaw for awhile, and you can do everything yourself here.  Save yourself the money, and use it towards paying off your debt. 
 
You'll need to give more information about your credit reports.  What's your open accounts, charge offs, collections, etc.
 
Here, you'll learn about...
Debt Verification
Debt repayment options (e.g., PFD)
What constitutes your credit score, and what you can do to maximize it.
Credit rebuilding
Good will letters....
 
There is a ton of good information here, and a very good support system as well.
Rocket

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