@dheather00 wrote:
Hello!
I am working on repairing my credit, and I could use a little advise because I can't decide. Should I focus on paying down my credit cards first, and then focus on PFD on the few collections I have left? I am starting my goodwill letters for the few items that I have already paid.
Thanks!
When I first started, I placed a larger emphasis on collection/charged-off accounts. At the time, my collection/charged off accounts were still relatively new and in my opinion were the biggest drag on my scores. I was able to negotiate settlements for pennies on the dollar.
Notably, this was a calculated strategy. During this time, creditors were slashing credit lines and closing accounts right and left. Despite a few bad accounts, I had a sizeable credit line with Citibank that had always been paid on time. My fear was that if I changed my spending or payment patterns, it would have prompted an internal account review and Citi would have slashed my credit line or worse case scenario closed my account.
For this reason, I paid off all my bad accounts first so that in the event my Citi account was negatively impacted, I had some leverage to negotiate in good faith.
Lastly, before finding this forum, I was unaware of the PFD option. However, all of my collection/charged-off accounts now have a $0 balance and have aged.
