Credit Master’s Tip #6 – How are you supposed to handle old, unpaid collections?

Credit advice from the internet, people who are making money if you can raise your scores and buy something from them or get a loan from them and those helpful friends, relatives, and coworkers that know someone who knows someone:

1. Leave them alone. I heard paying off your old collections your old collections will drop your score?!?!!
2. Pay them all off. I also heard that paying off your old collections will raise your score!!???!
3. Use magically delicious elf and magic. I met a pint-sized Irish fellow who smelled like cereal. He advises people to think about your old collections while you rub your belly and pat your head. You will be granted three wishes. One of which you can use to make your old collections go away??!?!

What you should do if your credit scores are an issue and the underwriter is not specifically asking a certain piece of bad debt be paid. Underwriters demands take precedence over everyone involved in your loan process:

1. Get good credit first. Good credit adds points, and bad credit takes points. If you are not going to file Chapter 7 Bankruptcy, start replacing those points you lose because of negative accounts.
2. The previous 12 months payment history carries the most weight. Any unpaid collection that is more than a couple of years old is not significantly affecting your score. Your scores might be low, but not because of that. You might not have any good credit, or too much credit, or have balance to limit issues or recent late payments and and and. Get a second opinion before you start shelling out money on old collections. Better yet call me and let me take a look. I don’t charge to review credit reports.

Pay those old collections only if the loan underwriter tells you too. Beware the person you are talking to at the collection agency will tell you anything to separate you from your money because:

1. New and don’t know anything, don’t want to or know how to or are afraid to ask for help. They also don’t want you to know that they don’t know. That is embarrassing. Their lack of knowledge doesn’t cost them anything.
2. Filled with unearned confidence because most people don’t know if or how to challenge their ignorance of 2 Federal laws designed to protect the consumer.  
3. Do not care because they are having a bad day and can’t focus, or were born mean, or are mad at their supervisor, or are sick but couldn’t afford to miss work or or-or.
4. Need to close accounts out to keep their job or hit a bonus, or to win a bet with a coworker.  

You might not realize this, but you don’t get a second chance to make a better decision in situations like these. You can’t unring that bell. Could you have negotiated a deletion? Maybe – Did they tell you they would delete the account if you paid it and but didn’t? Maybe – Did you pay an account that was too old to be on your credit report? Maybe – Was that collection supposed to be paid by your insurance and would have paid had you known how to ask the right person the right question? Maybe

Avoid avoidable mistakes by asking the right person the right questions. In this case, that person is me. Call me, email me or text me – https://4stepcredit.com/contact-us/