how to deal w/ collection accounts

I have been reading post on this board all weekend, and I must say that it is pretty touching to see how much everyone is willing to help each other. Lives can totally change from the help all of you give, and I think thatâ??s great.

I have read many posts hoping that someone has had a similar situation to mine. I wanted to avoid posting a question that has been answered a hundred times. However, while I have found great information, I havenâ??t found the advice I was looking for. Hopefully, some of you can steer me in the right direction.

Here is my situation:

My credit scores from the big three reporting agencies are TU â?? 584 (as of today), Equifax â?? 583 (as of 5/4/05), and Experian â?? 558 (as of 4/17/05).

I have one Capital One credit card with a $225 limit, and a $0 balance. I also have a line of credit with my credit union with a limit of $500, also with a $0 balance. Those are my only two revolving credit accounts.

2 years ago, my parents took out a mortgage for me for a $235,000 home. The house was just appraised for just over $300,000. My cousin happens to be a mortgage broker, so she worked with a lender (and made zero commission), to refinance my house under my own name for only 6.25%. I still owe about $230k on the loan my parents took out, but I am taking out a loan for roughly $240k (more on why it is $240k later). I will be closing on the new loan in the first week of July, 2005.

The only debt I have are my student loans which I just consolidated. I have just under $25k in student loans, at 2.625% interest. I had defaulted on all my student loans, and had to go through loan rehabilitation which took one year of on time payments. I successfully completed this, and the loans were returned to the original lender. As soon as they were returned to the original lender, I consolidated with UHEAA (thank you FatWallet!!)

Here is where I need your help. Back when I was in college (it seems many bad credit stories start out this wayâ?¦) I made some very poor decisions with credit cards, bad checks, etc, etc. According to my credit reports, I have about $4,000 in collection accounts. Varying in â??date reportedâ? from April of 1999, to August of 2004. As a breakdown these are the number of collections per year. 1999 â?? 3, 2000 â?? 3, 2001 â?? 6, 2002 â?? 2, 2003 â?? 1, 2004 â?? 3. The collections from 2004 are from items that were from several years prior to the â??date reportedâ? date.

In addition to the collection accounts, I have two unpaid credit card accounts for about another $2,500. Those have been past due for about 5 years now.

Originally, my plan was take out an additional $10k in my refinance, and pay off all the collection accounts. I knew that collection agencies negotiated collection amounts, so I thought I would do some research on if it was better to negotiate a deal, or to just pay the amount in full. That is how I stumbled across this site. From what I have read here, it would be best to send a validation request to the collection agency, then dispute it with the CRA.

I have not made any contact with any of the collection agencies yet.

Do any of you have any insight on how I should go about fixing my 6 year old mess? Another question I have is how to find out the mailing addresses of the collection agencies. The names of the collection agencies have very cryptic names for the company.

Lastly, when I completed loan rehabilitation, I was told that all negative remarks would be removed completely from my credit report. However, they are still on my credit report even though I have completed rehabilitation for over 6 months now.

Thank you in advance!

 

Thanks for the reply.

The mortgage is on the backburner now, because it is a done deal. The lender has already approved the loan, and I have a tentative closing date.

As far as my collections, they are all unpaid.

Thanks again!