[esmith86]

I had three credit cards that all went into collections. One was a visa with my bank that was $1000. I eventually paid once I noticed the bank was taking money out of my account. The second was a Capital One Master Card that is $500, last time I checked (about 3 years ago) the balance had collected interest and was at $750. The last is a card for a children's clothing store and the limit was $300. Considering I haven't made a payment for the last two cards in well over 3 years is it in my better interest to pay it off?

Also Ive had a cable and phone account debt for the same amount of time which was never paid and between them both might have been about $1000 or less. Is $2000 in debt going to hold me back from getting approved for a mortgage in the next year? I'm afraid if I start paying now my credit will still be bad because someone told me it starts from the time your account has been deliquint or when you started making payments, whichever comes first.

Help! Thanks

[DownUnder]

Well first of all if you owe you should pay it
Have you not gotten calls and letters about these debts? If you ignore this it will come home to bite you, the cc companies will take you to court and seek a judgement and that opens up all kinds of problems, such as wage garnishments and "frozen bank account" You can bet those late payments or no payments is already showing up on your credit report

[ballengerb1]

The person who gave you that advice is not knowledgeable about debt, at all. Those debts and your failure to pay has been noticed by the credit agencies and I am certain your credit score will be very low. Have you ever taken one of those free crditreports, I'd start now to see where you are at.

[BiWiccanAndProud]

If you have a debt it does affect your credit score! And it does bring it down! However the second you start making payments on an acc it starts to bring it back up. It is always in the better interest of a debtor to make payments. My advice call the collection agencies that have your acc's and see what kind of payment plans they can offer. Write the offers down for each debt. Then sit down and look at all of them!! If it is obvious that you can not afford the reconmended payment arrangements on each acc then either get out a calculator and create your own payment arrangements that you can afford to where you can start paying all the acc's at once and offer them to the companies (debt collection agencies can always tell you then a payment is too small to put an acc in a paying status but they can not turn away your payments). Or just go through them and figure out which ones need paid first and focus on them and do them and put the other ones aside for a while, whether you want to take care of small debts or larger ones first.

Point blank figure out from the payment arrangements given which ones you can afford to pay all together or figure payments out suitable for you. Then call back the agencies and start those payments! And some companies can even tell you how much interest can accrud over the time of payments you offer to help you in your decisions!

Also always keep in mind that you can always ask about settlement offers. I know that the company I work for offers settlements at 60% of the total, so it never hurts to ask. As far as I know bringing up your credit score doesn't matter on how much you pay back just on if you pay off the debt. If you have no debts on your credit report that's going to be an awesome credit score, especially if you are current on all your current bills.

Good luck and if you have any questions I would love to answer them.