Starting Credit Repair/Pay Offs

What is the interest rate? Depending on that, it may not be wise to just pay off the balance in one lump sum. That $4k may be better suited aimed at other open collections you have. Also, whether you pay it off in full today, or live out the rest of the loan, those late pays aren't going to change. They will eventually fall off (as each reaches 7 years), and when the last one does, it will be then be a positive TL. Depending on how old the late pays are, you can try to GW the OC on this. I'm familiar with one auto lender that will remove 1 30 date late as a courtesy, and perhaps there are others that will work even more-so with the consumer, but if there are "a lot" as you say, you may be better off showing positive payment history for the remaining amount of months/years left on the loan.

You won't see much of a score bump if you pay this off in one shot. Revolving credit lines do more for your score in this regard (debt vs available credit).

How old are the accounts/what are the DOFDs? Those that are still with the OC are easier to work with. Try a PFD, give a story, whatever you have to say.....
A paid collection is just as bad on your score as an unpaid. The only time a paid collection/CO is better is if you're applying for a mortgage and you are required to have the accounts paid/closed.

If you really want these accounts gone, you'll need to file a police report for identity fraud. This is taken very seriously, and you WILL get those accounts removed. When you say "agencies" who are you talking about? CRAs? or the Creditors? CRAs have no power to close an account, that's the creditors job. Who exactly did you contact in this situation?

Also, it does not sound like you have any open revolving credit cards of your own. You need these.

 

Depending on how many more months are left on the loan (say 15 out of 60?) at 14% you've already paid a huge chunk in interest charges on this account and the closer you get to the end, more and more of your payment actually goes to principal rather than interest. I understand you rather eliminate a monthly bill if you can, but I still suggest you keep the loan open as long as you can feeding it POSITIVE history. A 60-month loan paid in 40 months with 15 late pays and then suddenly paid off (total hypothetical situations here obviously) doesn't look that great to the next lender. But a 60-month loan paid in 60 months with 15 late pays in years 1 to 3, and then 3 years of solid on-time payments looks much better and will do more for your score.

Check your state's Statute of Limitations (SOL), depending on it and what part of 2010 and '11 these accounts are from, you may be past the SOL which puts you in a greater negotiating standpoint.

Did you submit the reports to the CRAs? Of course, in doing this, a Fraud Alert will be placed on your reports and applying for new credit will be tricky where you won't just be able to apply for a CC online on the fly, but you'll cross that bridge when you come to it.

Considering your report (correct me if I'm wrong) has no open positive trade lines, a secured card is likely the way you will have to go. Check with your bank, your credit union, find one that reports to all 3 CRAs and that GRADUATES into a unsecured CC, typically after 12 months of ON-TIME payment history. Be prepared to come up with at least $250 or more to fund a savings account as collateral for it.

Even if you wipe out all of the collection accounts, you are still going to have an auto loan littered with late pays, THAT combined with no current positive trade lines will make it hard to get an unsecured card right off the bat. UNLESS, you have a family member or someone that is willing to make you an AU (authorized user) on one or more of their CC's that has a lengthy history, NO late pays, and low credit utilization (i.e. 5kCL but has balances typically under 1k each month). If you can swing this, you then may be able to get your own unsecured card, but I would start with tackling the collection accounts first.

 

If this month behind on payment thing for about 6 to 8 months means the "last 6 to 8 months" and you also have the ability to pay it off in a lump sum, start paying on time immediately! The newer those late pays are the harder they are on your scores and ability to get new credit. I have a 30-day late on an installment loan from 5.5 years ago, it hasn't even been a blip on the radar in quite some time now, so unless you're able to negotiate something great with this auto lender, time may be your only savior on this one.

What part of 2010 was one of those collections? If it's past SOL or very close, LET it age past it, THEN contact the OC or CA and negotiate. You will be in a great position for a PFD since there's really nothing they can do it about it at point except let it sit on your reports for another 3 years. As far as the others, don't just pay them off, try to neogitate but be prepared to have to PIF. And don't call customer service. Google e-mail or mailing addresses of executives in the company, start high, send your letters certified through the mail give them a good story, ask if with full payment will they remove the negative entry/account. You could get lucky. This is with the OC's. When it comes to the collection accounts, first try to see if you can negotiate with the OCs, if they are unwilling to cooperate, and the accounts are within SOL, it's a decision you have to make, whether to lay low till the SOL passes, or start the DV process.

 

True, but a 4k installment loan won't make or break that. Open collections will.

Good luck!

 

Hi new to the site! Can someone explain to me what defines an open collection? I think i'm in the same boat as the original poster!

 

An open collection is a collection account that has a balance/is unpaid.