Question for you, my husband and i have pitifully bad credit 450-500 blah =( our own fault and now with three kids and needing to buy a house soon, we need to get things on track! I have gotten alot of "settlement" offers from collection agencies and i'm wondering if paying a lot of little settlements would be better or worse than just paying on the full collection of a few...From now until the end of the year i am working a second job brining in an extra $800-$1000 per month. I want to use this money to pay off our delinquent and past due accts. We have three credit cards that are open and active total owed is approx $4000. We have two loans out totally $6000 and NONE of these accts nor our two car payments are behind/delinquent...we have 3-4 CC's that are in collections, i have a student loan i'm being garnished for each month, and he has some past medical debt and all the "bad" collection debt is unsecured and equals approx $5K-$6K...so i guess what i'm asking is, do i continue to just make my monthly payments on our "good" debt, and take the settlement amounts and pay those off, or do i just go one by one and pay off each collection acct in full or do i just pay off all our "good" debt in totatl and leave the collection stuff sitting there til last? I don't understand which ones will actually raise the FICO scores the best????
Paying on collections will not raise your score at all. But paying them will keep from further negative from possibly showing up (lawsuit, CA sold to another CA ect)
You need to find out who owns the debt. CA or are they just collecting for OC? Deal with OC if possible. Find the DOFD and the SOL in your state, pays those still in SOL first.. Any collection you pay always try to PFD and if they agree get it in writing. I would also research on these boards the CA's and see how others have dealt with the. Sometimes you can get the golden contact info and get the item deleted.
For husbands medical debt research "HIPPA" letters/process
Paying down your current CC balances will give score increases, paying CA's won't and I don't think paying down the loans will either( but not %100 sure on how those are scored).
While paying the CA won't help your score, it will keep them from possible hurting you later during the Mortgage process, and many lenders will require them to be paid before closing on a mortgage. Personally I would tackle the CA's first, make on time min amounts payments on the open accounts. Again PFD as much as you can.
I would suggest "opting out" with the CRA's until you purchase a home. Also make sure you are looking at Fico scores and not Fako's