How to pay off debt and repair credit score?
I recently inherited a substantial amount of money and now have the financial means to pay off my debt.
I have about $17,000 worth of bad debt that shows on my credit report in the form of judgments, charge-offs, collection accounts and such. This debt is from miscellaneous sources such as utility companies, credit cards, merchants and a small student loan. It also includes a judgment from an eviction. All this debt is 4 to 7 years old. Many of the accounts have been bought and sold more times than I can count. Even trying to find these account creditors to pay them in the first place looks very hard.
I would like to pay off all my debt and get negative items removed from my credit report.
I would love to hire an attorney to assist with this if need be. What is the best way to deal with all this?
Paying off the debts does not magically remove them from your credit report as they remain there for 6-7 years after you have paid the debt.
It seems you don’t fully understand the purpose of a credit report. It is a summary of your credit HISTORY. You have had debt issues in the past and it is only fair that potential lenders know this, otherwise there is no point in having a credit report.
Not knowing the current collectors of your overdue accounts strongly implies you have been trying to evade your debts by ignoring mail and phone calls pertaining to your debts.
All in all, your credit will remain messed up until at least 2015 in the context of being able to procure further credit
I don’t think hiring an attorney is a good idea. you should save the money that you are going to spend on the attorney and just pay all your debts. you should start paying all your payments on time, i recommended that you pay more then just the minimum balance. Stop all spending. just buy what you need and not what you want.
BTW i don’t think you will be able to get the negative items removed, you must wait for about 7-10 years until everything is clearer out.
- Negative items only stay on your credit report for 7 years from the original date of default. It might be best to do nothing if some of these debts are getting near this 7 years mark.
Many collection agencies that deal in old credit card defaults are very, very aggressive..and you might get an unpleasant surprise at how they might respond to any good faith effort to pay back the debt. They might respond by demanding 2 to 3 times that actual amount of the default in fees and interest…and threaten to sue you if you don’t give them your bank account numbers.
- You can find out who has your accounts by pulling your credit report. You can get a free credit report at – This is the real free site to get your credit report once a year without a credit card.
- When a credit card defaults (called a “charge off”), the damage to your credit has been done and it cannot be undone by later paying back the debt. Paying back this debt will not fix your credit rating. A charge off stays on your credit report for 7 years from the original date of default, even if you pay the debt back in full. At best, your credit report would be updated to Paid/Settled R9 Charge Off status with a $0 balance, still bad but a little bit better. It is for this reason that you might as well get the best/lowest settlement you can get.
Confirm the statute of limitations for credit card debts before you pay:
How to pay/settle credit card defaults:
Become an expert at repairing your credit
Go get a book on Credit and Debt Repair from your bookstore (cost about $15)
It will teach you how to negotiate settlements
(just because you have money now – does not mean you should not be cheap)
On some one time items you can do a pay on delete (erases info from reports)
It will tell you important things such as – how never to give them access to your checking
And it will tell you which items to leave alone – since some items drop off due to statute of limitations
the negatives are not coming off in fact paying them will mean many of them will stay on longer. If you contact them many will come up with fees and interest that “accumulated” generally on accounts that old best to let sleeping dogs sleep. Student loan no choice needs to be paid. Utilities seldom ever sell accounts so they are easy to deal with but the rest will bend you over