New Contributor
tmacar
Posts: 91
Registered: ‎03-25-2008
Re: Success Stories and Encouragement
Oh my God, judgments can kill you. DO NOT just pay them. I'm assuming (and hoping) that there's some reason they can't easily collect on them, or they already would have. Most bad stuff, once it's been paid, has less and less effect on the score as it gets older. It has seemed to me that the "lessening" of the bad effect is a lot slower with judgments than it is with even collections. Be aware that paying them will not get them off your reports, and you will notice, in fact, that paying them has effectively no good effect on your score right away. The trick is to get rid of the darned things. And you do have leverage.

Almost nobody who goes and gets a judgment ever expects to collect the full amount awarded. They expect to settle for some lesser amount. And that is your leverage. What you do is offer to pay the full amount, in return for them having the judgment dismissed. If there is some good reason that they have been unable to forcibly collect the thing, your leverage is even stronger. In a case like that, you're essentially giving them the choice between getting nothing and getting the whole thing. And in cases where they could forcibly collect if they wanted to bother, you're still offering them a larger sum than they'd get if you agreed to and paid a settlement. And the only work they have to do is fill out and sign a dismissal request. Many, even most, creditors, will go along. They're looking for money, and you're offering them money in return for almost no work on their part.

One thing - make sure you have their signed agreement to dismiss the judgment (after you pay) in hand before you give them one cent.

This will end up costing you more than the "settlement" amount they would be willing to take, but the effect on your credit of eliminating a judgment from your record is more than worth it, and I am speaking from experience.

About your auto loan. I'd been getting those refi notices from both Orchard and Capital 1 for some time. I never responded because I knew my truck was both too old (11 years) and had too much mileage (155,000). Either one of those, all by itself, would have kept lenders from touching it.

However, a credit union, one I didn't even belong to before the loan, just refinanced my 21.9% finance company loan, at 5.49%, and I could have had it for 4 years, although I didn't want that long. My credit had finally gotten back to being "good" (701 on Experian, which is what they used), and I discovered that if your credit is "good", they don't even care about the age or mileage. They're making the loan based on your good credit, not the vehicle's value, because they don't expect to ever have to repossess and sell the thing.

So if your credit gets good enough before your current loan is paid off, you ought to see about refinancing the thing, no matter how old it is or how many miles are on it.

And, finally, do whatever you can to get the revolving utilization down. I was at 82%, with a score around 650 or so. My credit had gotten good enough, although just barely, to let me borrow from a credit union. I applied for $4,000, got $2,500, put it together with my own $1,800, and paid my revolving down to about 23%. That was at the end of May. I further paid things down to 14%. My scores now are Eq 724, Ex 715, and TU around 730. (TU is "around" because it hAS A SINGLE ERROR THAT IS COSTING ME AT LEAST 50 POINTS).