low credit score -- suggestions??

Yes, and even more so if they are not real old.

I would opt for the charge-offs first, b/c these are the ones that are likely to come after you with a lawsuit. Get them under control as quickly as you can. Of course, I am assuming your "old" debts are somewhat in good standing?

Is this social security? I am trying to assess if you are judgment proof. If you are, you might not want to do a debt consolidation or the like, and just pay your debts as you are able to. I have been told that credit counseling services are just as bad as BK when it comes to your credit score.

 

In my opinion debt reduction or debt consolidation plans are never a good option because they all cost money could be better used to pay off debts by doing it yourself. The only advantage they have is that they have contacts with creditors that you don't have. Some creditors will work with such plans and others won't.

You say that you are retired. If your retirement is from SSI, VA or other government retirement you can't be garnished easily but it has been done because oldsters don't know or are unable to fight it due to extreme age or physical or mental disability.. Senior citizens can be sued and they can have
judgments against them but if they make the court aware that they are on a government pension they can't be garnished. Banks will sometimes stop garnishment against pensioners too. They know what the source of the account holders income is when SSI or other pensions are the sole source of income so will put a stop to the garnishment. Property can have a lien put against it so judgments against senior citizens can eventually be effective if the creditor keeps renewing the judgments until the pensioner passes away.
So don't think that senior citizens are totally judgment proof. If they own property a judgment can eventually be effective but their immediate income is garnishment proof if they inform the court that they are on SSI or other government pension. Some other pension plans are also garnishment proof. Although I don't know for sure, I've heard that 401(k) and other similiar type plans are also untouchable.

My thinking is that you should start with tme newest first if you insist on paying off debts. The oldest are affecting your credit scores the least and may be close to or past the Statute of Limitations for bringing suit against you in your state.

If they are past the SOL in your state and they sue you will have to go to court and defend but that is easy to do. An out of SOL defense is normally unbeatable in most if not all states.

That depends on what you mean by "positively affect". Paying off charge-offs
isn't normally good for your credit scores the debt is large and you pay
it all off. That will reduce your overall indebatedness and increase your score that way but if the debt is rather small it won't help your score enough to make any measurable difference and might actually hurt more than it helps.

Credit scores are affected more by having current accounts in good standing for a long period of time and keeping low balances than most other factors.

Paying charge-offs usually hurts more it helps.

Why do you want to become debt free within 5 years? What goal do you have in mind that requires you to be debt free within 5 years? If it is to buy a home then you will want to do that but if your goal is just to be debt free then it may not be worth it to you.

 

What's your ultimate goal?

You say you have a low credit score and that you want to be debt free in five years. Those two may or may not be related and are usually "sub goals" of a larger objective.

If you just want to be debt free, then pay your bills or declare bankruptcy. That may or may not help your credit score, but you will certainly become debt free. You might also want to review your lifestyle and spending habits to make sure that you stay debt free but, that is yet another goal.

If you want to raise your credit score to obtain some other credit (e.g. a house or a car) then that means incurring additional debt which is somewhat contrary to being debt free. Additional debt isn't necessarily bad, (opressive or mismanged debt, however, IS bad), but it's a different goal from being debt free. If you want to boost your credit score, then you need to review your reports and start working on all the negative information. There are lots of threads that cover the different strategies that each different situation requires so start doing some homework.

In either case, it sounds like you need to start sorting out where you are, where you want to be and how to get from here to there.

 

To answer your original question, forget about your credit scores for now. What you need to focus on is developing a sound financial plan, i.e a budget and goals, as well as a debt repyment plan. The credit scores will come.

First, lay out your monthly income, and then your monthly expenses. Factor in expenses which will come up annually or periodically. Don't worry about being 100% accurate to start. You will refine as you use it. Get an idea of how much you need to live (realistically), and then how much you'll have each month to pay debts.

Next, start tracking all of your spending, get the real picture of where all your money goes. The goal here is to reduce expenses below income.

Next lay out all your debts, and total them up. Take the total and divide by 60 (five years X 12 months) to see if this average number is below your "budgeted" amount for debt repayment. Adjust accordingly your time to repay.

Now examine all of the debts and put them in order of age. Look up your state's Statute of Limitations for legal collection (i.e judgement). Any debts older than your state's SOL, put on the back burner for now.

For all the debts within SOL for legal collection, contact the company, and try to work out a repayment plan. Explain that you have done all the calculations, and your proposed payment plan is the absolute best you can commit to. Ask for the accounts to be "frozen", i.e. no further interest charged, or "settlement amounts". You are trying for the best deal to repay over time.

Keep track of all your debts, payments, balances etc. with a spreadsheet, or paper and pencil.

Also, consider how you may earn extra income, a part time job, etc. Look at ways to reduce expenses also. You state you have a high interest rate car loan...do you need "this much car"? Or could you get by with a cheaper car? Can you take in a roommate? Get creative, and you'll start to see the pennies adding up.

So, forget about your credit scores for now, focus on financial management basics. I recommend the website www.about.com for financial management documents and articles. This site is the best for the average consumer, and the documents are very straight forward.