Repairing Credit - Need Advice

sunnysideup · 04-09-2006, 11:21 PM

I have a few questions and need some input about repairing credit. I've been reading articles on the internet but I would like to send my situation out to everyone here and see what you guys think. I hope I'm posting this in the right area.

DH had some things go into collections a few years ago and we are just now in the situtaion we can start trying to fix what was done before we were together. I read some articles that said it was better to leave old debts and wait for them to fall off the credit report. Does anyone know how that really works? I've read that seven years from the first deliquency it just falls off the report. If that is really how it works it would be gone in 2009. He had 3 things go to collections, two are small and we could easily handle, but the other one is over $10K. Anyone have advice on how you would deal with this?

We want to fix what we can and start to rebuild the credit so that hopefully in a few years we can get a house. Does anyone have advice on the best way to rebuild credit. I've read about secure credit cards, piggybacking on other's credit. Mine is really good, I've never had late payments and I have a high score. Would having him piggy back on mine hurt me? Would it be better to have him solo?

If anyone has been in similar shoes I would love some advice before we jump onto the long path to repairing the credit.

Darlene · 04-10-2006, 06:59 AM

I don't have much knowledge in this area but know there are ladies here that can help. I just wanted to jump in and wish you good things as you carry on and get back to where you want to be money health wise.

Great goal you are striving for.

04-10-2006, 08:05 AM

It will be seven years from the last payment on the debt. Seriously. If you make a little payment today- you'd have to wait another 7 yrs to clear it.

Medical bills generally don't affect you negatively on your credit- so you could skip that. CC will affect you negatively- for seven long years. But the good news you have 4-5 years remaining on the debt.

It does, literally fall off your report. Gone. Just check it in the time it's due to be removed and if there... request it's removal.

My first husb ruined my credit with his gambling problem, although I paid back every red cent of debt I owed- payments were late at times. When I married again, DH piggybacked me onto his cc in order to build my credit back up.

It worked. Soon, I got a car loan- paid on time, everytime- then got some cc's, a mortgage... you know the American Debt Dream. So, it's possible to rebuild.

If you plan to piggyback- make sure he pays those bills on time- that'll ruin your credit for sure.

FrugalMomof3 · 04-10-2006, 08:15 AM

I agree with FrugalFanny.... if you pay one cent on those collection they will be back on your credit report for another 7 years, so let them go, my hubby did that but let me tell you, after 14 years, we get a call about a debt my hubby owes, it's annoying but it's an old debt so I just tell them to stop calling.

I had bad credit before, I paid everything off, even those in collections and now my credit report 3 years later is great! My score is above 750 and I ALWAYS pay everything on time and more than the min. payment (except for the mortgage right now).

After I paid everything off, I was able to get a mortgage (in my name), a car and even CC's, just remember dont take on any more debt for a while and work hard to get those collections off the credit report when the 7 years are up, believe me it works.

Good luck and keep us updated.

ama · 04-10-2006, 08:27 AM

I tell you I have learned just about everything there is about credit these days. I went from a score in the 500's and now I'm in the high 780's. I got my first c.c. with a limit of $7700! Hard work does pay off BUT there is a huge industry that makes a living b/c most consumer don't know their rights. I'll get off my soap box but this has been a huge quest of mine.

If you have any questions feel free to pm me....I don't mind sharing with you whats worked for me.

missymomof3 · 04-10-2006, 09:10 AM

Hold on... if you pay off a collection debt it effects you negatively? Does that mean that it would be better to just not pay it at all? I had one that popped up from 2003 that my ex-husband was supposed to pay just recently and I paid it. Was that a bad thing?

thrifty gal · 04-10-2006, 09:48 AM

A good site to check out for info on cleaning up your credit report is www.creditboards.com

SHOPGIRL · 04-10-2006, 04:45 PM

Every state is different on their statute of limitations. Your state may be less than 7 years. If your credit card is already in collections, than most likely it's been charged off by the lender. So, don't pay anything right away until you figure out what's best for you.

If you have student loans, or back taxes, you should always pay those right away. Those will never leave your credit report.

Unfortunately, paying everything back, once its been charged off really won't help you get better credit. Usually those collection agencies buy your debt from the credit card company for a nominal rate, so everything they get basically is profit.

Your husband might want to get one of those secured cards with a low limit and pay it off monthly to build up good credit again.

If your credit card debt hasn't reached collection status, then just make sure you make the minimum payments at least. You really don't need to pay a credit card repair service to "fix" your credit. You can do it yourself. It will take awhile to build it back up, but you can have good credit again.

sunnysideup · 04-10-2006, 04:59 PM

Thank you so much for your input everyone! I know this is going to be a long road back to the good side of credit for DH and I'm really glad to have this website and the support everyone offers. I know he doesn't have the patience to research into things like I do, that's why I offered to look at everything I could find before we took the next step. I'm really glad for all the posts.

ama · 04-10-2006, 07:36 PM

Creditboards and creditinfocenter.com are 2 faves of mine. I owe the info center most of the things I've accomplished. Read all you can and then read some more. You'll get it -- it does take some work but there's def something to be gained from it all.

Valerie in WA · 04-11-2006, 11:30 AM

I'm bothered by something here, but maybe I'm misunderstanding the situation.

Are you all talking about NOT paying the debt and waiting for the statute of limitations to pass, in order to improve one's credit score? And that if one does pay the debt right now, one's score would be negatively impacted? So the general consensus is to not pay the debt and get a better score.

This is JMHO, but that seems very dishonest to me. If someone owes a debt, they owe it. Period. If their credit score is lower because they took a long time to pay off the debt, that is a natural consequence of the financial difficulty they had. Furthermore, by never paying that debt, they are increasing the costs of lending for EVERYONE. Lenders charge interest and fees to make a profit, but they charge HIGHER interest and fees to make up for people who never pay their bills.

Am I off base?

ama · 04-21-2006, 08:48 AM

I don't suggest ever that anyone not pay a debt that is theirs and wait for SOL to pass just to get out of it. But I will tell you that a PAID collection does not affect your credit in a positive way at all.

Not to get too technical but in THIS instance I would suggest what is called a PAY FOR DELETE. You must get it in writing -- once they get their money it must be deleted off your credit report. I also suggest trying to go through the Original Company and see if you can settle with them. Collection agenices walk a fine un-legal line. Dealing with them is not something I suggest but there's a whole new world to learn about there.

Much like the gas companies...the credit industry is getting filthy rich. They def don't go to bed hungry at night.