Pay of CCs or PFD collection

[boogiesaveslives]

Hey folks!  I'm trying to prepare my credit to purchase a car in the next month or two.  I'm coming into a few extra bucks and have been planning on paying down my credit cards.  I'm currently at about 50% utilization.  I also have 3 collections, 2 of which I have DV'd and am impatiently waiting for the 35-40 day mark since they have yet to validate.  One of these buggers is Midland, which yes, they are now reporting the same account twice, so it's more like 4 collections reporting right now.  One of the collections is from 2009 and is a valid HSBC/Best Buy account.  

Question is, should I use my extra cash to bring down my utilization or PFD the HSBC collection?  Which do you think would give me the best bump?

Thanks!

[RobertEG]

If you need results in the near future, then a PFD might not get you there, as they have no period to respond.  It could just sit.

Getting the collection deleted would give the bigger bang, but it is not in your control.  You takes your chances....

As a side issue, if they are currently under a timely DV from you, then offering a PFD would be a bit improper.

You have placed them under an automatic cease collection bar by sending the DV.  Legally, they could not negotiate terms of payment while still under that bar.

[pizzadude]

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@laurasiew wrote:

Hey folks!  I'm trying to prepare my credit to purchase a car in the next month or two.  I'm coming into a few extra bucks and have been planning on paying down my credit cards.  I'm currently at about 50% utilization.  I also have 3 collections, 2 of which I have DV'd and am impatiently waiting for the 35-40 day mark since they have yet to validate.  One of these buggers is Midland, which yes, they are now reporting the same account twice, so it's more like 4 collections reporting right now.  One of the collections is from 2009 and is a valid HSBC/Best Buy account.  

Question is, should I use my extra cash to bring down my utilization or PFD the HSBC collection?  Which do you think would give me the best bump?

Thanks!

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Unfortunately, there is no FICO score boost for paying collections.   Either as paid or unpaid they will hurt your score, and the best option would be if you could negotitate a PFD agreement to get the collection removed.

Paying down your revolving utilization definately helps boost your FICO score, I would go that route if you need to bump your scores quickly.

[boogiesaveslives]

Thank you for your response.  Just to clarify, I would PFD the collection account that I did not DV.  I might just split the money up by paying off the collection and paying less on the credit cards.  

I sent Midland a DV, didn't stop them for a second.  Still calling, sending letters...

[LIGHTNIN]

I would try to PFD the collections, because they are probably still within the states SOL.

I would worry about the CA's taking out a judgment, that would be a huge hit to your score.

Then tackle the current debts with the CC's. Your scores willing be looking good then.

Here's a way, to have the lowest car payment as possible.

Look into joining a CU, they have the best interest rate for auto loans.

Save some money for a down payment.

Then you will have a nice car, with a great interest rate.

By doing it this way, your past debts will be gone, current CC can report about 9% util.

All of this will equal to a nice low monthly car payment, and a fine looking FICO scores too.

I know this isnt what you wanted to hear, but you can do it and you'll be glad you did.

[boogiesaveslives]

Thank you everyone for taking the time to respond to my post.  Sounds like it's a split decision here!

[Anonymous]

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@laurasiew wrote:

I also have 3 collections, 2 of which I have DV'd and am impatiently waiting for the 35-40 day mark since they have yet to validate.

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Hey.  I just wanted to point out that you are waiting for a timeline that doesn't exist.  I know someone else mentioned it, but I just wanted to make sure it didn't get lost in the other things Robert said.  If you have sent a DV in a timely manner, they can take as long to respond as they want.  The key is, they have to stop collecting until they do, which includes reporting to the CRAs.  What this means is that if they are not validating, they have to stop reporting right away.

However, I will agree with others that paying down your CC is the best way to go.  it won't help your score as much, but it is guaranteed and doesn't rely on others to do anything.