Bad credit score of a college student

[Anonymous]

Hey everyone,

So here's my dilemma. I am a college student with a 586 bad credit score. I am extremely illiterate when it comes to the credit system. I owe my low credit score to the $150 copay that I didn't pay. According to the most recent credit report, the claim was made ten months ago. The collection agency is AMCOL, which, from my modest research, appears to be a collection agency that handles medical bills among other debt. Very recently, I signed up and received a secured credit card with a low credit line. I bought this card in hopes to start rebuilding my credit early.

One thing for the record, I am, thankfully, not too worried about credit right now. I am more concerned about when the day comes after college when I want to buy a car or or start a mortgage or maybe take out a loan. I figured I'd start to clean up the mess now and become more aware of my credit history.

With all that being said, I really want to pull up my credit score and I am contemplating paying off the $150 debt to AMCOL and have them agree to wipe it away from my credit report. I have done some research about pay for delete (PFD) and read from some contributors on this forum that it has worked out for them.

My question to you is: What do you suggest I do? Should I PFD the $150? Will I see my credit score rise? If I should go through the PFD route, what is the process (possibly refer me to a detailed thread)? Alternatively, will my good spending habits on my credit card, bills, etc. make up for that over the years and pull up my score so that the $150 debt won't matter in the long run?

I tried to give some details in hopes of getting a more well-rounded answer. If you'd like more information to help me with my dilemma, please ask and I will share more as fit.

Thanks for your time.

M

[Anonymous]

If I were you I would request a pfd (just google 'pfd myfico' and multiple threads will show up) don't pay the debt until they send a letter stating they will delete it once paid. I thought I had read about some other bills but checking back it's not there? Is that the only derogatory mark on all 3 reports? Overall you will want to have good spending habits and pif all of your cards each month, except one. Have one card report a balance of 1-9% ideally, but under 30% util will be okay. Don't go over 30% util. Since the debt was recent pfd route is best otherwise it will show up until around 2022. And, dilemma* sorry that's driving me crazy.

[Anonymous]

Thanks for responding and for pointing out the spelling mistake.
Regarding what you said about credit cards, I only have one secured card that I received this month. I have yet to spend anything on that card. What do you recommend I do? I was planning on paying off my balance on time each month. I'm wondering if by doing so, will they still report a balance even if it was paid on time each month? I really don't want to pay any interest.
M

[Anonymous]

paying credit card.   Basically you want a small balance to report - as long as it's paid in full by the due date - you will not have interest.   However, many of us pay down the cards before the statement date.  i.e. My Discover card has a $500 limit - I use the card all the time - and then go online and pay it down.   The payment is due the 6th of each month, but the statement cuts on the 8th.   So I go in on the 7th and pay it down to like $10 balance (so it reports) and then don't use the card until after the statement cuts.   That way it reports a $10 balance to the bureaus - and I just pay it off on like the 10th - never pay interest.

Ideally you want 3 cards - and only one reporting a SMALL balance each month.  It's easiest to have the SAME card report each month so you don't accidently have two cards report - but if you do and each is under 10% it isn't going to kill you.   Utilization is a snapshot - and if you pay it off - the card will report a new balance the next month and your score will fluctuate.   It won't be a big deal once you get your scores where you want.

Ideally you want to get 3 credit cards reporting (or store cards) and an installment loan.  Credit unions are good for a small secured loan.  You can find more out in the forums.  I didn't go that route because I have a car loan reporting - but it might be an idea for you.  You take out like a $500 secured loan - then open a secured cc with it - make the payments (which over 3 years are like $15 a month) as well as use the card.  

Good luck!

[Anonymous]

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@Anonymous wrote:

Hey everyone,

So here's my dilemma. I am a college student with a 586 bad credit score. I am extremely illiterate when it comes to the credit system. I owe my low credit score to the $150 copay that I didn't pay. According to the most recent credit report, the claim was made ten months ago. The collection agency is AMCOL, which, from my modest research, appears to be a collection agency that handles medical bills among other debt. Very recently, I signed up and received a secured credit card with a low credit line. I bought this card in hopes to start rebuilding my credit early.

One thing for the record, I am, thankfully, not too worried about credit right now. I am more concerned about when the day comes after college when I want to buy a car or or start a mortgage or maybe take out a loan. I figured I'd start to clean up the mess now and become more aware of my credit history.

With all that being said, I really want to pull up my credit score and I am contemplating paying off the $150 debt to AMCOL and have them agree to wipe it away from my credit report. I have done some research about pay for delete (PFD) and read from some contributors on this forum that it has worked out for them.

My question to you is: What do you suggest I do? Should I PFD the $150? Will I see my credit score rise? If I should go through the PFD route, what is the process (possibly refer me to a detailed thread)? Alternatively, will my good spending habits on my credit card, bills, etc. make up for that over the years and pull up my score so that the $150 debt won't matter in the long run?

I tried to give some details in hopes of getting a more well-rounded answer. If you'd like more information to help me with my dilemma, please ask and I will share more as fit.

Thanks for your time.

M

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I wouldn't be so quick to pay them. I would find out if the OC still owns the debt and try and work something with them first. Maybe they can recall the account and it could come off your report. Before you pay anything, make sure you get it in writing.