Where to start?

The first place you should start is by getting a copy of your credit report. You're entitled to one free copy from each of the three major credit bureaus (credit reporting agencies, or CRAs) each year. You can get this at annualcreditreport.com. This will give you an idea as to which debts are actually affecting your credit report. Not all debts do, but as a general rule of thumb, anything involving a bank, finance company, or utility company will. Most things involving recurring monthly payments will. Some, such as Netflix, probably will not.

How old are you? I only ask because if you're young and simply don't have a credit history, there may be better options than a secured card.

Also, if you're "shopping around" for credit cards that will approve you and you go applying to one after the other, that will put a big hit on your credit score. Inquiries remain on your credit report for up to two years, and they do the most damage when they're newest. The best bet is to use a credit card comparison tool, find one card with the terms and rates that you like, and apply there.

 

It will quit reporting on your credit reports.however they can try to collect,it could be sol in your state,plus they could sue you.

 

Haha - I think we've all said something almost exactly like that the first time we saw our reports. Ok, you took the right first step -- you got information.

Next up is finding out how much of that information is correct. There is a disturbing (there's no better word for it) amount of inaccurate information floating around on credit reports out there. Personally, I had a handful of entries that I had never even heard of, let alone done business with. Here's my suggestion for "phase two":

Research your state's statute of limitations as it relates to filing a lawsuit over a debt. Most states are 3 to 5 years. Find all of the debts on your credit report that are past the SOL. For example, if your state's SOL is 3 years, and the last payment you made on Credit Card X was on March 1 2006, and your next payment was due April 1 2006, then you are probably safely past the SOL. Find all these debts and set them aside for now -- they are the easy ones.

Of the remaining debts, are any of them blatantly not yours? I don't mean "they COULD be mine", I mean debts that are very obviously wrong. Maybe a foreclosure when you've never had a mortgage, or an unpaid car loan for $800,000. Put all these debts into another pile -- they too are easy to deal with.

Of what's left, is any information incorrect? Maybe you do in fact have a delinquent credit card with Credit Company X, but the amount should be $1200 and not $12,000. Put all these debts into a third pile.

What you do with the remaining debt depends on what you want to do with your credit. Are you trying to clean everything up and start fresh? Are you just trying to "shake the dirt off" your report? Are you hoping to buy a new car or a home in two years? There are very different ways to go forward based on your goals and what type of debt remains (credit card? Judgments? Unpaid student loans? Taxes?). Personally, my approach has always been to "let sleeping dogs lie" and "stay off the radar".

Ultimately you should pay whatever debt you legitimately owe. But you must be absolutely certain that the person you're paying it to is authorized to collect it, that the debt is enforceable, that the debt is valid, and that the amount is correct. Throw us some more specifics and we'll try to help. It will take a long time (cleaning up my report took a year to get started and will be ongoing for at least another two years), but once you get everything locked down it's worth it.