Trying to improve my credit score. Need some advice.

[Krynj]

So I've done some careless things with my credit since I was 18. Got a couple credit cards, a cell phone, and failed to make the payments. Overdrew a bank account and didn't want to pay the fees.

During college I was moving around a lot, so I never wanted to change my permanent address, so for the entire 4 years, all my mail was going to my parents' house. They did their best to keep track of all the bills, but some have been lost over the years.

Today I looked at my report on annualcreditreport(dot)com, and it doesn't look too bad. There are 4 debts that are way overdue, but they aren't very expensive at all. Although it may have been a mistake, I called each of the agencies and discussed payment plans for each debt. To my amazement, each collector proposed a very appealing settlement. According to the statements on my credit report, I owe a combined total of $1,200+ to 4 different collectors. After speaking with all of them today, I could settle all these accounts for around $520 and some change, which I believe is the amount of money (before interest and other fees) that I actually owe. I can pay this easily over the next 1-3 months, but should I? And no, I didn't use a debt consolidation company. I called the different agencies and spoke with them myself.

Some say it's best to let old accounts fall off the credit report, as paying off very old debts will only keep them on there. The earliest of the debts are from 2004, some others in 2006, and some others from within the last year. Would it be best for my credit to simply pay these off and be done with it?

I have some medical bills on there too, but I'm going to dispute some of these, as they should have been covered by my insurance. And even if the insurance company refuses to pay the bill, this agency can set me up with a plan of $35 per month. But I'm not worried about this one so much right now. I just want to get the older ones taken care of.

So, can anybody provide some advice? Is there anything I can do to get these agencies to go even lower? I want to clean up my credit score, and the settlements they've offered seem like a good deal. But then again, I know next to nothing about all this stuff, so I'm hoping for some guidance here.

Many thanks in advance.

[flacorps]

Do not be a babe in the woods. Read a lot more (here and on other boards) before you make those settlements. You need to negotiate for finality, you need to negotiate how they're going to report on your CRA reports, you need to make sure that any who are lowering the bill more than $600 are NOT going to send you forms 1099-c.

[Krynj]

So what kind of questions should I ask them? What are the answers that I want to hear? I don't know much about this stuff, so I don't even know what else to do, other than pay the outstanding debts. I don't know enough to play hardball.

A 1099-c form is a cancellation of debt, right? How come I don't want this form? Are there any forms that I want them to send me?

[Krynj]

I owe money to 4 different agencies, and none of them cut their own bill by more than $600. When I spoke with each agency, they each offered their settlements, and the combined savings to me is about $585 across all 4 agencies.

I'll give them a call back tomorrow. What should I ask them will happen once the debt is paid in full?

[interstudy]

While it is your MORAL responsibility to pay your debt, many times especially when every penny counts, you should use any money you have to pay on what you owe now to avoid items becoming delinquint, rather than paying off something that already is.
You also need to remember, even if you pay off an old debt, it is still a negative mark. And as long as it is on your report, it will be a neg. Even if it says paid. The fact is that the payments weren't made on time and it was defaulted. Thats what made it a neg. Trust me, lesson learned here the hard way.

[NightStar]

get back a hold of the collection agency, ask that if by paying they will consider payment in full and seek no further collections. If you settle for less they might agree to report paid in full on the credit report. BUT if you pay in full, you might be able to get their agreement to outright delete the listing off of the credit report for good. That is the best possible outcome.

You should 1st ask them to send you debt validation. To account for the balance, due date and so forth. You might be out of the Statute of Limitations and no longer be required to legally pay these debts. That might give you more leverage to settle for even less. If you try disputing with the credit reporting agencies 1st you might get the items deleted, and thereby not have to worry about paying if it is gone.

Good Luck with this matter.