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Hello,
I will be buying my first house in the next 5 months. I have been working on my credit for the last 8 months. I have taken an installment loan and credit card. All of these accounts have been paid each month and are in good standing. I have some collections on my credit that I was unable to get removed. Should i just pay off all the collections first. What would be the best move for me. Here are my scores as of now:
Trans Union Experian Equifax
547 603 514
buying a house
Hi Evans,
The first step towards improving your credit score is to pull a copy of your credit report. Check the status of the collection accounts. Try to pay off these accounts. However before starting to make payments, you should request the collection agencies to agree to a "Pay for delete" (PFD) agreement. With the PFD all the negatives from your account will get removed. You will get a sample PFD letter with this community.
Then check if there are any wrong listings on your credit report. To improve credit score, you should try disputing all the wrong listings with the credit bureaus. If you aren't sure with a debt listed under a collection agency, you can send debt validation letter to the agency. Under the rules of Fair Debt Collections Practices Act they won't be able to continue with the collection process unless they validate your debt.
Thanks,
Aaron