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I’m 27, and I spent the better part of mylife screwing up my credit in one way or anouther. I got married and help my wife screw up her credit even worst then she had it when we got together. A few years ago, I started talking to a creditor and made arrangements to western union them some money. I never heard from them again and more to the point anouther company rose in there place collecting for the same bill and stateing that they never even heard of my payment. This made me scared to pay anyone. I concitered doing backrupsy but was talk out of it. Now I want to make a real effort to fix my credit and buy a house. How do I get started. Is there some group or orginization that can help me concolidate my bills or at the very least tell me who I owe and the best way to pay them?

What do I do?

4 Thoughts on How do I start repairing a lifetime of misdeeds to my credit?
  1. Katherine W
    July 14, 2011 at 5:19 pm

    Wow. OK, first, get a copy of your credit report. It’s free at http://www.annualcreditreport.com. Get just one copy from one of the companies, you don’t need all three. The Western Union thing was a scam, you can report it to the police, but there’s nothing they can do, really. You will need to show the company that you did report it, though, so that’s worth doing. So, look at your report and figure out who you owe money to and how much. Call them up and tell them that you will start paying it down immediately. Ask them to work with you: can they reduce the interest rate while you make payments. If they won’t work with you, go to a nonprofit organization that will make calls to get the rate reduced, because you don’t want the amount climbing so high while you’re trying to pay it down. Then, make more than the minimum payments on everything, work two jobs or whatever you have to do. Also freeze all your cards in the freezer so it’s a pain to use them unless you have to. Find a card with a low interest rate and see if you can move the balances there. Then, pick the card with either the highest rate or the lowest balance, and put most of your payments to that, so that you reduce your costs (if high interest) or see the best results (if it’s the lowest amount). After four months of this, get a credit report from one of the other two companies (still free because you didn’t ask that company this year), and see how you’re doing. Keep checking every four months. You’ll see progress! Good luck to you!

  2. Kathryn
    July 14, 2011 at 5:40 pm

    Katherine W’s answer was very good, but I wanted to add two things:

    1) Do not cancel accounts once you’ve paid them off. This can lower your score by reducing the amount of available credit you have.

    2) Check the Federal Trade Commission’s advice about how to choose a reputable credit counselor (see link below). Don’t assume that just because they advertise themselves as nonprofit that they actually are.

  3. Johnny
    July 14, 2011 at 5:56 pm

    This will be hard, but save $ 1,000. Go to the bank and open a Certificate of Deposit (CD), then apply for a $ 1,000 loan. Offer your CD as collateral for the loan. Repay the loan in monthly installments, and you will begin to rehabilitate your credit. Most banks will look favorably at CD secured loans, even with a poor credit history.

    I’m a Loan Officer and have given this advice many times over the years.

    Good Luck!

  4. beth
    July 14, 2011 at 6:51 pm

    For Collections:
    1) Be aware that not all creditors report to all 3 credit reporting agencies. TransUnion may have something different than Equifax, etc.

    2) If you promise to pay (or make even 1 cent payment), you are resetting the 7 year clock!

    3) Research, research, research. Find out how your actions are going to help/hurt you. Use RELIABLE sources like your state’s Attorney General. (My state has a lot of consumer protection information online)

    4) Collection companies sell your debts to others. There are a lot of loopholes on how they can affect your credit reports. If you can, I personally suggest dealing with the original creditor who sent the account to collections.

    5) Beware: there are a lot of SCAMS out there that target people wanting to improve their credit!

    6) MOST IMPORTANT: Document EVERYTHING when dealing with Collections! They record the phone call on their end, record it on your end – be sure to tell them on tape that they are being recorded! Only send letters/money certified mail, return receipt requested. Photocopy everything!

    7) You may want to consult a lawyer to help you through this. Many places, organizations have a free consult or published material to help you.

    8) There are Federal & State Laws that restrict what a collection agency is allowed to do, read it. Federal: Fair Debt Collections Practices Act

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