A General Mess

[Anonymous]

I am just starting the journey of cleaning up my credit and I have a couple of questions. To start with, I have a score of 630 right now. I have two charge offs and 3 other collections on my account. If the amounts make a difference, the three collections are under $200 each, one charge off is $800 and the other is like $2800. I still have 3 years before I hit the statute of limitations/fall off period on these accounts except the $800 one which should go off in July of '08.

I decided to go back to school this summer to get out of a dead end job situation but I just found out that their tuition payment program requests more money up front then I had budgeted. So my main question is this: Should I eat ramen noodles for the next 6 months to just pay for this in cash and let my credit just wait a little longer? Should I (hope I can) get a credit card to help pay for my expenses and try to start paying off the three smaller collections and then pay off the credit card and the bigger stuff once I'm done in the fall? Should I try to get a loan from a bank or credit union so I can pay off everything?

Does any of this make sense? Do I have options I don't see here? I really need to do this program this summer, it is only two months long and it will easily increase my salary potential by about 40%--just for the record it is for teaching, not some fly by night profession. But literally, by the time I pay the first installment for the tuition it will drain all but like $300 worth of my savings. At the end of the summer I am planning on selling my car as I won't need it any longer and I expect to get about $4000 for it so that is why the higher tuition thing is throwing me for a loop. I thought I could wait until the fall to take care of it.

Thanks if you got this far into this! Let me know if I need to clarify this. I really do want to get my credit report together, I have been so good in the last 3 years with everything paid on time etc and I really just want a fresh start with a new job, and no awful skeletons hiding in my credit report!

[Anonymous]

SOL and the 7.5 year report period are different.

SOL depends upon the state where you live and that determines whether a creditor can sue you. Reporting period is how long adverse info can be reported to the CRAs.

If all you have are these collections, let 'em lie. They ain't gonna go anywhere. Are they calling, writing and threatening?

When do you start back school and when is tuition due?

Assuming you had the cash to PIF all your collections today, it's going to take a month or more for that to update on your CRs. Even then, paying collections ain't gonna help your FICOs. A PFD will likely take several weeks to negotiate.

With a 630, you could probably get a credit card, but I suspect it'll have a low limit--probably under $1,000. I'm not trying to discourage you from applying, but if you're thinking you could get a $10K limit I'm probably bursting that bubble.

Do you have an account with a bank or CU? A student loan or a signature loan from a bank or CU might be your best bet.

[Tuscani]

Also check out:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=2689