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I have a large debts on my credit cards which has gone to collections. My credit score has gone down. Can anyone suggest how to improve my credit score and how long will it take to improve my credit score.
Credit Card Debt
Hi Jack
If you want to improve your credit score, you must first try to pay back the credit card debts one by one. You may go for a debt consolidation loan to pay back the debt which will consolidate all credit card debts into a single loan account. Debt consolidation loans come witha relatively low rate of interest as compared to that of credit cards. But before going to pay back the debt in full, you should send debt validation letters by certified mail to the collection agencies or the creditors whose name appears in your credit report. Only if they validate your debt within 30 days of receipt of your letter, you should proceed forward towards negotiation for payment of the debt.
Yes, Anthony is correct. You should first start with debt validation to repair your credit score. Debt validation is normally made to be sure whether the CA or the creditor whose name appears on your report actually owes the debt or not. If they can validate the debt, it means that the creditor actually owes the debt. However, you are liable for the debt to the CA or the creditor for 30 days from the date they receive your letter. If they do not validate the debt within 30 days, you are no longer liable to the creditor for the debt and you can send a dispute letter to the credit bureaus to remove the negative listing from the credit report.
credit score
Hi I think pay all your dues then will improve your credit score.
take debt consolidation loans with cheap rates. I think
anthony is saying right. You must follow his steps.
Hi Mark
I too agree with you. Debt consolidation loan is one of the easiest way to get out of excessive credit card debt. But to get a debt consolidation loan, at a favorable rate, you should have a very good credit score. However, if you do not manage to get a debt consolidation loan, you should try to negotiate with your creditors for a repayment plan to pay off the debt. However, you should always agree to a repayment plan which you think you are capable of repaying.
Credit card debt
I agree with Carol to a point. You will not get a favorable rate on a consolidation loan if you even get approved. And if you make payment arrangements, that will take forever to get the debt paid back. I was in a similiar situation and ended up going with Debt Settlement. I knew I owed the money, I just needed an affordable way to pay it back. I ended up paying back roughly half what I owed including the fee to the company that helped me. They also put me thru their credit repair program and raised my score 114 points. Here are the companies I looked into; Freedom Debt Relief, RAM Financial Services, and DSUSA. I ended up going with RAM.
Good luck to you!!
If you have a very poor credit score due to delinquencies, improving your score may take some time, may be a year or so. You can start correcting your credit score by yourself. For this, you need to first pull out your credit report and remove the hard inquiries that appear in your report. Hard inquiries can be removed by sending letters to the inquirers asking them to verify your authorization. Most inquirers cannot verify your authorization and remove the listing from your credit report. Now you should send DV letters to the creditors to find out to which creditors you actually owe the debt.
RAM Financial
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Look for story titled "Debt settlement nightmare for Phoenix woman."