Hello all. I am at my second go round in cleaning up our credit. Life happened. Two years ago, we got our credit all cleaned up and managed to get 3 credit cards. We used them responsibly, paying them down to next to nothing each month, and kept current on all of our bills. My husband had some major health problems and I lost my job â?? life happened. We spent almost a year barely treading water with the basic necessities. I have recently settled a lawsuit with the employer who fired me. I am now trying to come up with a plan to get out of this mess again. We would like to purchase a home. We have 3 CCâ??s all closed and maxed â?? along with their late charges and a few medical collections. Thatâ??s the bad. The good is 4 car notes. Two paid off, two current with no lates. Several small loans, all paid on time and paid off before â??life happenedâ?. Plan of action? Use the lump sum to deal with the CCâ??s in hopes that paying them off will raise our scores enough for a somewhat decent home loan. or Use the lump sum for a down payment on a home through a sub-prime lender. (if that is even an option) I havenâ??t paid for our FICO scores, but can bet the average is around 550. Any ideas?
Are the CC's charged off? If so, paying them off won't lower your scores. IF they have lates, that hurts too. Getting a loan that you don't want will haunt you long into the future. I would try to settle with the CC's with that money. I would seek settlement or agreement with them. You can ask for a paid-for-delete agreement and see if they go for that. If paid-in-full isn't an option, you can try to settle, although it's much harder to clean up scores like that. This is not advice, but if it were me, and I could afford it, I'd offer paid-for-delete. Or I would try to settle with payments or a lower amount in exchange for their deleting my lates. Some CC's will bite, some won't. You have options, it depends on what you want your future to be and when. Good luck, at any rate.
Paying them may not lower your score, but it won't raise it either. Before you do anything, get hard copies of your reports and see how everything is reporting. Trying to get a PFD may be like pulling teeth. See what is reporting wrong. Dispute it. Ask for validation on anything a CA is trying to collect. Let us know what your report says and we can give you some more help.
