I'am 27 in school, I want to start trying to clean up my credit report. I have stuff in collections that are all old as in 2 or more years old. I also have a gym membership that has went in to collection and I have tried to work with the credit collector but they won't even talk to me and if I call to up date information or to work out something they hang up on me instead of trying to work out some kind of agrement. My Mom has told me just to mail them a money order for $20 bucks or what I can afford that week and mail it so at least it shows I'am trying. She also said to photo copy the money order just in case they try to take me to cort. I just want some advice on how to get all this taken care of and get my score up. Also I work retail and don't make a lot of money at all. Any budgeting tips will help too. Thank you, :)

Sending 20 dollars can't stop them from taking you to court, they may always sue you for a judgement if you don't pay them in full.

Also depending on the size of the debt 20 dollars a month may not even pay the interest on the debt.

If you live in a state that allows garnishment, they may take @ 25 percent of your pay ( depending on where you live) So that is a figure to start thinking about when you go to repay.

So you need to start a very aggressive payment plan to pay off your debts

Would I be better off going threw a credit councling or a backrupsy lawyer to get a all of this on some kind of payment plan that all parties can agree up on?

Quote:

---

Originally Posted by Jordana27

Would I be better off going threw a credit councling or a backrupsy lawyer to get a all of this on some kind of payment plan that all parties can agree up on?

---

No that is the worst thing you can do especially right now. If you are trying to clean up your credit while you are in school I am assuming that it must be for you graduate and look for a job. The first step is to get your free credit report from all three credit bureaus and go through it and check for errors. I would even suggest going to the fico website and getting your credit scores (fico NOT fako). Fico just modified the credit evaluating system and things that have been in collections for two years don't hurt as much as things that are in collections that you have been paying off. Sometimes it is best not to wake a sleeping giant. Remember, pay your bills on time. If you don't have any credit my first suggestion would be to get a secured credit card. The best way to show that you are responsible with credit is to have it and use it, but not abuse it. Start with one card only. It will ding you initially because it is a new line of credit, but eventually after paying off that bill every month on time and not going over the limit it will start to pay off in your scores. This will show lenders that you are on the right path to being responsible with credit. If you need anymore tips just ask. I fixed my credit on my own and I am more than happy with the results. You don't need credit counseling service or a bankruptcy lawyer especially if it is not more than like ten grand.

Quote:

---

Originally Posted by Purdue2010

No that is the worst thing you can do especially right now. If you are trying to clean up your credit while you are in school I am assuming that it must be for you graduate and look for a job. The first step is to get your free credit report from all three credit bureaus and go through it and check for errors. I would even suggest going to the fico website and getting your credit scores (fico NOT fako). Fico just modified the credit evaluating system and things that have been in collections for two years don't hurt as much as things that are in collections that you have been paying off. Sometimes it is best not to wake a sleeping giant. Remember, pay your bills on time. If you don't have any credit my first suggestion would be to get a secured credit card. The best way to show that you are responsible with credit is to have it and use it, but not abuse it. Start with one card only. It will ding you initially because it is a new line of credit, but eventually after paying off that bill every month on time and not going over the limit it will start to pay off in your scores. This will show lenders that you are on the right path to being responsible with credit. If you need anymore tips just ask. I fixed my credit on my own and I am more than happy with the results. You don't need credit counseling service or a bankruptcy lawyer especially if it is not more than like ten grand.

---

This will help me a lot, thank you for the advice. I would take any more you have to offer since you know what Iam going threw. Thank you once again.

You can contact them and ask for a settlement of the debt, but get it in writing before paying them, Many agenies will lie.

Quote:

---

Originally Posted by Fr_Chuck

You can contact them and ask for a settlement of the debt, but get it in writing before paying them, Many agenies will lie.

---

You are absolutely right about that. Sometimes if you are really good you can get them to delete it off your credit report all together, which is the best way. I owed $50 to Blockbuster from five years ago, I sent the collecting agency a letter stating that I do not accept the debt, because I didn't want to take the time to validate that the debt was actually mine, because I don't remember from that long ago if I did actually owe Blockbuster. Anyway, I told them that I would pay that settlement amount if they would delete it off my credit report, and they sent me a letter three weeks later telling me that I didn't have to send them any money and that they would just delete it from my credit report.

Jordana, check your credit scores and your reports and I can probably tell you where to go from there.

As a tax professional and bankruptcy law consultant, I can address the part of your question regarding bankruptcy. First of all, cleaning up a credit report is easier said than done, especially if you have delinquencies and collection items from 2 years ago and now a third item that's going to collections. Even though Fair Isaac (that's FICO) has changed some reporting criteria, the overall negative imprint is still there. Would-be lenders and potential creditors may likely deny your credit requests or offer you ridiculous rates because of the risk. And now, credit card companies can view your payment activity with other lenders. This is why a lot of people are getting letters from their creditors that their credit limits are being reduced.

You're probably better off saving your $20 and using it for gas money or something else. While it is an honest attempt to repay a debt, the collection agency rarely ever views it that way and can still go to court and get a judgment against you for the full amount. (You didn't say how much the debts are.) The judgment could be a bank levy, or wage garnishment (unless it's prohibited in your state), and when a judgment hits your credit report, it can hit with a fairly large impact.

Credit counselors and debt settlement services can negotitate with creditors but remember, they're not lawyers. Even though you sign a POA (power of attorney), they can't offer you legal protection or guarantee that you will not be sued. POA simply means they can represent you legally in a negotiation. Most of these agencies will expect a fee for a settlement. Debt settlement companies work best only if you have lump sum money available to make quick settlements with the creditors. And some of their retainer and commission fees are ridiculous.

Lastly, there is bankruptcy. For many years, most consumers believed that bankruptcy was a horrible thing. It's often thought that people who file will live with the emotional stigma of walking away from their debts. Bankruptcy filings have sky-rocketed over the past 2 years because for most of those people, there simply is no better alternative. Most people who file already have damaged credit. Their main concern in filing is to achieve peace of mind and regain control over their finances. They're not too worried about credit scores at that point.

Chapter 7 and Chapter 13 are the most popular. Chapter 7 is also called "fresh start" bankruptcy, while Chapter 13 is the "payment plan" chapter. Once bankrutpcy is filed, all lawsuits, threats, garnishments, bank levies come to a halt, or a "stay." Creditors cannot attempt to collect anything from you. You are essentially applying to the federal court system to protect you. And once you receive a discharge, you are relieved of any liability to repay those debts (except for IRS, student loans, and child support). And those creditors can never come after you again. If they did, they can be sued. Bankruptcy is quite complex and involves a lot of financial documentation. Chapter 7 will stay on your credit report for 10 years, but within 2 years of the discharge, you'll find that many creditors will start making offers to you for loans, credit cards, etc. If you choose this route, then consult with a good bankruptcy attorney. Good luck to you!