Will settling bad debts put me on the path to a higher Fico?

[Moog]

Just got turned down for a new apartment due to my Fico score. My girlfriend was told that she qualified but that I did not due to my bad credit. The irony is that I have been paying all of the bills for the past two months while she is looking for work and I would've been the one paying all of the expenses for the move. I'm actually the one who can afford the new apartment but I didn't get approved!

My question now is what is the best way to move forward in repairing my credit and raising my Fico score?

I have four credit cards that I defaulted on years ago during financial hardship. They are past the SOL but will be on my credit report for another few years. Should I start the process of disputing these debts with the CRA's in an effort to get them removed or should I try and settle with the JDBs?

I hate the thought of paying even one dime to the scum that bought my debts but if it will be the fastest way to get back on track I will do it.

If I settle my debts will they stay on my CR longer than if I just wait it out? What are the pros to settling (if any)?

Any advice on which course of action is the best way to start repairing my credit is appreciated (I've been reading these boards for sometime and find it all pretty confusing!).

[Dre]

That's great you have started or been paying your bills on time for the past 2 months. Continue to keep doing that; the longer the bad debt has been on your CR's, the less effect it will have on your score.

Settling bad debt: Unless you are getting the negative history removed from your CR (paid for delete), I would not settle any debt. Paying your debt now while it's already in collections probably will not increase your credit score. The collections will still remain on your credit report - up to 7 years or longer.

You stated it in your post: "Should I start disputing these accounts with the CRA's?" Yes. Start the disputes and the DV process or you did state the accounts should be falling off your CR soon or passed th SOL - if so, you could wait b/c sometimes it's nice to let the sleeping dogs rest.

Are the collections agencies notifying you? Could you post more information about the accounts you are referring to?

[Moog]

That's great you have started or been paying your bills on time for the past 2 months. Continue to keep doing that; the longer the bad debt has been on your CR's, the less effect it will have on your score.

Hi Esquire, thanks for the response.

I think I gave the wrong impression about paying my bills. What I meant was that I found it ironic that my girlfriend was told that she qualified for the apartment and I did not when in fact, I have been paying all of her bills as well as mine for the past two months! Also, I alone would've been paying first month + the $2100 deposit to move into the new apartment but I am the one who was denied due to my credit report. I guess that's just the way the game works.

As far as actually paying my bills, I have been really good about that for most of my life. The credit cards that have ruined my credit were from a time when I took a risk on purchasing equipment for a studio project that did not work out. I did not know anything about incorporating or how to protect myself financially at that age and as I result I just buried my head in the sand and tried to ignore it all. Being denied on a great apartment was a fresh reminder that I need to take control of my credit once and for all!

Are the collections agencies notifying you? Could you post more information about the accounts you are referring to?

These past due accounts have all been sold to JDBs. Some have even passed to different collection agencies over time. I've long missed the window to do the one two punch and have been basically just waiting until they fall off of my record (still another 2-3 years to go).

I am ready to take the necessary steps to get my credit scores up whether that means disputing with the CRA's or finally caving and paying the snakes who've purchased my bad debt.

[willingtocope]

You don't list what state you're in...it doesn't happen to be WI or one of the M-states, does it?

[Moog]

You don't list what state you're in...it doesn't happen to be WI or one of the M-states, does it?

Sorry about that! I am in CA.

[Moog]

My basic question in this thread is whether or not settling with the JDBs is going to raise my FICO or not. There is a FICO simulator on myfico.com that suggested my score would go up by as much as 40-50 points within a months time if I settled the revolving accounts. Is this correct?

[Dre]

My basic question in this thread is whether or not settling with the JDBs is going to raise my FICO or not. There is a FICO simulator on myfico.com that suggested my score would go up by as much as 40-50 points within a months time if I settled the revolving accounts. Is this correct?

I learned the hard way. I paid off one collections, and it did NOT raise my credit score at all. Later, I kept disputing it, and it did eventually fall off.

So if you do pay, make sure you get a paid for delete - should be stated in your letter to the CA.

[Moog]

I learned the hard way. I paid off one collections, and it did NOT raise my credit score at all. Later, I kept disputing it, and it did eventually fall off.

So if you do pay, make sure you get a paid for delete - should be stated in your letter to the CA.

Interesting, thanks. I think I'm going to set up a call with a CIC counselor as I just have SO many questions! The more I read here the more confused I start to feel lol.

Thanks for your help.

[Dre]

Yes. This journey will be confusing but the whole credit world is , especially when you start fixing it yourself and learning about the laws.

Weird things will happen: good or bad. When the good happens in a weird way, you kinda shrug your shoulders and smile.