Hello- So, I have about $8000 worth of debt. And poor/fair credit. Most of my collection accounts are medical debt from when I did not have health insurance. About $1000 is with Certegy from two checks form 2005. About $2880 of the medical debt is with a lawyer. About $2000 of the debt is from 2004, so it will be dropping off my credit report very soon. These are with a CA which also hold 4 other accounts which are much more recent. After ready through a great deal of the posts here (which are more helpful than anything else I have ever found, thank you), this seems like a good game plan: Send NDA PFD letter to Certegy, offering to pay full in exchange for removal Send letter to CA holding other debts, specifically referencing the newer debts and not mentioning the older ones. Also NDA for PFD Can I do the same with the lawyer? From what I understand, paying these without negotiating deletion will do nothing for my credit score. If I canâ??t negotiate PFD, am I better off going to the OC and trying to negotiate a smaller payoff amount? Any other options? Iâ??m not trying to make a huge purchase or anything anytime soon, just generally trying to improve my credit. Regarding that, I have one secured card and one other card with very low limits that I pay off every month. I have just realized that my utilization is too high so Iâ??ll fixing that right away. I had read it would be a good idea to get a store credit card too. Iâ??m not ready to go for an auto or personal loan just yet. So, any other comments or advice?
You are correct - paying these old collections will likely not help your credit scores unless the accounts are completely removed from your credit reports. Both "unpaid" and "paid" collections are treated as negative accounts by the credit-scoring models, although a "paid" collection will certainly look better to potential lenders. Anyway, if you have the money and are prepared to clean up these old accounts, your plan to move forward with the NDA strategy for full payment sounds like a good one. If the medical debts have just been assigned to a CA, there's still a chance you might be able to work with the OC/hospital/doc's office and request that they pull the account back from collections so you can pay them directly. This is sometimes easier to do with medical debts. In regards to your credit cards, keep the utilization under 10% and before getting a retail card I would recommend trying to upgrade your secured card to an unsecured credit card first. Retail cards can be another good way to improve your credit history, but they aren't as easy to get these days and generally come with very low limits.
So, the CA has had the accounts for a couple years- does that mean I need to deal directly with them as opposed to OC? Also, do I need to do anything differently in dealing with a lawyer? I talked to him once last year and he seemed real relaxed about the whole thing. At that time, not knowing any better, I am pretty sure I acknowledged that the debt is mine and promised to make payments and then, things happened, etc and I didn't. But I he did not re-age the account according to my newest credit report. So I will try to upgrade the secured card to an unsecured and wait on the retail card till my score is a little better. The other card- another huge mistake of mine- is a subprime with ridiculous fees and horrible customer service. I've had it less than a year. Can I cancel it or am I stuck with it? Thank you so much for the advice.
I'm assuming the CAs have purchased your debt. If that's the case, then yes- you'll need to work directly with them. If they've only been assigned the debt, there's still a chance that you could work directly with the OC and convince them to the pull the debt back from the CA in return for full payment. Also, if the lawyer has been hired to collect your debt, then he's considered a debt collector and shouldn't be treated any differently. Likewise, he must adhere to the FDCPA just like any CA. And if you're unhappy with your current credit card, you can always call up the credit issuer and close the account.
