Need Advice! Which is Worse?

CreditDrama85 · ‎09-13-2007

ive been getting more serious about rebuilding my credit. long term i know i will be able to pay my debts but it is a gradual process that will take a few years. with that being said, i have been letting my dept store cards slide in an attempt to get more important bills current.

i feel like im being penalized though for having so many late payments! would it be better to let some accts charge off and then pay the balance when i have the lump sum? or should i continue racking up a million 30, 60, 90 day lates and just pay the balance off when i have enough money?

btw, all 3 of my credit reports are almost idential but experian is 115pts lower than the others. that is not normal. can i do something about that?

Anonymous · ‎09-13-2007

CreditDrama85 wrote:

ive been getting more serious about rebuilding my credit. long term i know i will be able to pay my debts but it is a gradual process that will take a few years. with that being said, i have been letting my dept store cards slide in an attempt to get more important bills current.

i feel like im being penalized though for having so many late payments! would it be better to let some accts charge off and then pay the balance when i have the lump sum? or should i continue racking up a million 30, 60, 90 day lates and just pay the balance off when i have enough money?

btw, all 3 of my credit reports are almost idential but experian is 115pts lower than the others. that is not normal. can i do something about that?

Late pays and charge offs are never a good idea. If your debt is so far out of control that you cannot make minimums on all but one and pay more on at least one,its time for intervention.

First - Are you able to make minimums on all cards?

If so I would pay minimums on all cards except the lowest balance. On that card I would pay as much over the minimum amount as possible until paid out and continue that way knocking out the smaller balances first.

Once the first card is paid off add whatever you were paying on that one to the minimum of the next lowest balance.

I usually recommend paying of the one thats costing you the most first. It seems that you really need to get a handle on the debt and the only way to do that is to lower the number of payments first.

If not possible. You can try and negotiate your debt with your lenders with lower interest rates but it may result in closure of the cards. If you're not comfortable with that CCCS can work wonders.

Message Edited by Brammy on 09-13-2007 08:47 PM

PayYouNever · ‎09-14-2007

i have to agree with Brammy, it's better to deal with the lates than to get a charge-off. As you can potentially get the lates removed with a GW, but getting a Charge-Off removed or altered is obviously more difficult.

A debt management plan isn't a bad idea, I'm on one for two cards and the payments get made with APRs that are really low (like 7%, which is great for someone with a 516 FICO).