I am working on paying off multiple old debts from college & med school years of bad money management. I've had several credit cards and other small things (I had a freaky propensity for signing up for book of the month clubs I couldn't afford - I was an idiot) on my credit report, listed under OC and/or the CA that ended up with them. Now that I'm better established financially, I've been working on all of these things. I paid off my current credit cards and they're in good standing with zero balances. I've paid off several large debts through the collection agencies and should be done paying everything in a week or two, which feels so good. I pulled my credit reports in the spring, when I started paying all of these, through the free annual credit report. I also monitor through True Credit for changes, to be sure old things that weren't on the original reports don't pop back up now. My husband and I want to buy a house in the spring, so I'm trying to get things in as good as a shape as possible.
I have a few questions:
1) I understand that paying collection accounts won't change my credit score, is that right? I'm still planning on paying them because on manual review, having them all closed and marked as "paid" can only be a good thing. Plus, I've heard many lenders won't close until all outstanding collections are closed. I've got the money to finish that in a couple of weeks.
2) Should I write goodwill letters to all of the CA/OC's that I've paid and ask that their listing/trade line be removed from my credit report? I can't see where removing a collection agency reporting would hurt, because it doesn't affect my available credit limit. Would that help my credit score, by removing derogatory entries? Do closed/charged off credit cards factor into my credit limit? Is there any harm in having them removed?
3) Anybody know a good resource for a sample goodwill letter and where to direct them?
4) There is one entry on my credit report that confuses me. The original creditor is not listed. There is a listing for "AAC" which is apparently a collection agency that had the account at one time. Then there is a listing for Asset Acceptance, the collection agency I made payment arrangements through. The Asset Acceptance listing has been updated to "paid" but the AAC is still listed as "derogatory". Should that be on the listing in duplicate since they are neither the original creditor (Bank of Marin) or the current collecting agency? If not, what should I use to dispute that?
Thanks for your help! Just reading these forums has been very helpful.
Jessica
