09-25-2010 08:45 PM
Hi everyone, I just pulled my credit report/score- my score is a lovely 491. I screwed up a lot in my past with an ex and had a joint account, I know I was totally stupid- but now I have been thinking about getting a house (in a year or two- I already have 10,000 saved towards a down payment) so I decided to pull up my report and try to clean house. I've noticed a few of the collections have fallen off and that the rest fall of Feb 2012. My school loans were defaulted but I am currently in a rehabilitation program that I will be done with by April next year. I have two charge offs as well that will fall off this year and next year. The only other thing that shows up on my report is my car loan which I have paid on time for the last three years. My question to all is I have the money to pay off these really random debts all totally about $1,200 should I pay them or will this hurt me from even getting a house anytime soon. What should I do about the debts that have fallen off should I try and hunt them down to pay them off as well?
Any help would be helpful- I just need to try and build up my credit as fast as possible.
09-25-2010 10:50 PM - edited 09-25-2010 10:58 PM
The problem with unpaid debt is that you dont normally determine the next step that any debt collector, or original creditor may take. That is up to them.
So it is very diffuicult to give firm, objective advice.
One thing is clear. If you pay any debt without a prior, written agreement from the creditor/debt collector to delete prior information from your credit file in exchange for that payment (a PFD acceptance), it wont improve your credit score.
I would not, unless your conscious mandates, hunt down and pay a debt that has dropped from credit reporting, and has passed SOL.
It will have zero help to your credit score, and pose no legal threat.
The very first things you do when evaluating any collection (or charge off) is to:
1. know the date of your first default with the original creditor.
This date, and this date alone, determines how long the CA or CO can continue to be posted in your credit report.
The expiraton from inclusion in your CR is 7 1/2 years from your DOFD. Period, and final.
2. know your state statute of limitations SOL) for that type of debt.
If the debt remains unpaid, they can bring legal action at any time to recover the debt (unless you live in Texas)
Then you must go into court, and prove that your state SOL has expired.
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