Credit Repair Questions???
I am in the process of cleaning up my credit myself and I am getting some conflicting information and need some questions answered. 1) I have a credit card that I reached a settlement amount on years ago. I was told that there is a "zero balance" form letter that I can use to change the status on my report from "settlement" to "satisfactorily paid". Does anyone know where one is and how that works? 2) I have several small collections ($100-$300) on my credit that I am going to pay off. Is it better to have those show as paid or get those items removed entirely? If removed entirely, how do I do that? 3) The only line of credit I have is my car note. It currently shows some late payments. Any advice on getting those changed to a current status? I'm hoping to be in a position to purchase a home in the next 12 months and my credit is bad. I do have money to pay off my debts and I want to make sure that everything looks good when finished. Any other advice is appreciated.
Public Comments
- 1 - Never heard of such an item, and doubt that it exists. The best way to avoid the dreaded 'settled for less than original balance' is on the front end-by negotiating with the creditor. 2 - Paying the collections will do you NO GOOD unless you get them to agree, in writing, to remove the item from your credit report once it is paid. Don't agree to anything until you have that letter. They will always try to tell you that they can't do that, at first. Don't believe it. They can and will if negotiated properly. 3 - You can dispute the late payments. The FCRA says you can dispute items as many times as you want. If they don't respond to the credit bureaus within 30 days, they must remove it. Send dispute letters to each of the bureaus that the trade line is reporting to. What you don't have is revolving credit - and you need it. Get a secured credit card and your score will immediately jump 30 points. I have a credit repair company with in-house Realtors and mortgage brokers and these techniques have worked for us many, many times. Good luck!
- When you get a copy of your credit report, you can ask the individual bureaus how to take the negative items off your report. Once you are debt free, you'll have an easier time buying a house. But don't buy a home until you have at least 20% for a down payment (to avoid mortgage insurance) and can afford to make monthly payments on a 15-year, fixed rate mortgage. If either of those two components are missing, then you are not ready to buy a house.
- First thing, when paying your debts, send a letter to your creditors stating that you would like to pay the debt in full with the the stipulation the item is listed as "paid" and not as "settled for less" or "charge-off". After paying the settlement, follow up to obtain a zero balance letter from the creditor, so you don't have bogus collection problems later on. As far as the late payments on your car, the creditor has a legal responsibility to "report" that you were late. However, if you continue to make ontime payments, you could send the creditor a "Goodwill" request letter stating your past situation, and asking them to adjust the credit history. This is not illegal, since the creditor did report your tartiness, but there is nothing in the law saying the creditor can not remove the negative comments... It may be worth a shot. As long as your FICO is above 600, you should be able to get a mortgage, just at a "suckee" rate. Good luck.
* Some answers may have been provided by Yahoo! Answers.