Hi guys, I've been taking the advice of some of the members on this site and I have seen some positive changes. Just recently my husband and I decided that we really want to purchase a house next year, and our main focus from this point on is fixing our credit. My husband is in the Navy, so we will be using the VA assistance. We both have a few things on our credit that are easy to pay off, but will that help us in any way? Most of the items on our reports are under $500 and are from cable, electric companys. Would it be wise to pay these debts off and also is there anyway to get them completely removed once they are paid?
Don't expect your credit scores to improve just because you pay off old debts. This is a mistake that many people make when they start trying to clean up their credit reports. Remember, "paid" collections are just as damaging to your FICO scores as "unpaid" collections. They're both deemed negative marks in the eyes of a credit-scoring model. While I certainly condone paying off old debts you truly owe, you need to keep your credit scores in mind as you go through the process. Let's go through each of the negative items on your credit reports and we'll try to help you devise a strategy for each. In some cases you may be able to get them completely removed in return for payment, but that doesn't always work. Give us some more detailed information about each debt from your credit reports, and we'll help you get started.
Josh is right on with his answer. Also, if you choose to pay off a old collection, always negotiate the debt to be removed completely off of your report before you pay the collection. If you pay off the collection first there will be no reason for the CA to remove it from your credit report. Thanks! Heather with BoostMyScore.NET
I dont have my CR with me at the moment, but I will definitely give you guys more details when I can. I read somewhere that if the account is showing a delinquent status, then its best to pay that debt and thats a good way to raise your credit score. Is that true?
Paying off valid delinquent debts is certainly the right thing to do, but it won't necessarily improve your credit scores. In fact, it could even worsen your credit scores. What you want to do is negotiate removal of late pays, collections, charge offs, etc. in return for payment.
There is another way to increase your credit scores. You can ask a friend or a family member to add you as an authorized user to one of their existing credit card accounts. You must make sure they have perfect payment history and can maintain a low balance (10% of less of the credit limit). The higher the credit limit and the longer the payment history the bigger the increase. Thanks! Heather with BoostMyScore.NET
