advice needed on debt

[dms520]

I have posted on the boards before but im kinda embarassed to use my other name. I have really bad credit and I dont know where to start(It kinda scares me also). I have some of my old credit cards that have went to collections. I'm going to be rec. a good bit of money from a accident and I want to pay everything I owe. Do I have to get ahold of the old accounts (like target) or do I have to get ahold of the collection agencies handling the accounts now? Another question should I pay off my car loan I have (I have about 3 yrs left maybe it will help rebiuld my credit? that would be the only thing in my name on my credit report) I dont know the rate is on it (I think 12%) any ideas are welcome I understand alot of people are debt smart on these boards thats why I'm asking here. I do understand I did this to myself but I'm trying to make things right. Thanks for any help you can give me.
dms

 

[minnie1928]

I would post your question at www.creditboards.com and spend some quality time reading their forums. They are a wealth of knowledge and experience on what you are dealing with.

Whatever you decide to do, get everything in writing. Communicate with everyone via written correspondence. Do NOT send collection agents checks drawn on your personal account, use a money order. Do not talk to them over the phone.

Good luck

 

[eliza61]

I have posted on the boards before but im kinda embarassed to use my other name. I have really bad credit and I dont know where to start(It kinda scares me also). I have some of my old credit cards that have went to collections. I'm going to be rec. a good bit of money from a accident and I want to pay everything I owe. Do I have to get ahold of the old accounts (like target) or do I have to get ahold of the collection agencies handling the accounts now? Another question should I pay off my car loan I have (I have about 3 yrs left maybe it will help rebiuld my credit? that would be the only thing in my name on my credit report) I dont know the rate is on it (I think 12%) any ideas are welcome I understand alot of people are debt smart on these boards thats why I'm asking here. I do understand I did this to myself but I'm trying to make things right. Thanks for any help you can give me.
dms

First, congratulations on wanting to change your situation and make your life better.
Second, every body in life has made mistakes. You pretty much don't get through life totally perfect. I've done things with my money and credit that would make you

Minnie above, has great advice. Start reading!! A lot of people here like Dave Ramsey (he never did any thing for me but that's not the point) books.

Do you have a current copy of your credit report? that's a good place to start. It will show a lot of those negative reports. I'd start with simply gathering information in an excel spread sheet.

Also do you track your spending? start figuring out where every dime goes.

Good luck with this journey.

 

[bumbershoot]

creditreports.com and daveramsey (and a message board about his stuff is llnoe.com...dave's own website requires a paid subscription), that'll help you!

Ramsey isn't too into keeping a good credit score, because so many people want a good score so they can get more credit...if your motives are just for better insurance premiums, a possible sane mortgage someday...then just ignore that part. He also believes in paying off what you owe, so some of the stuff on creditboards (paying attention to the end of statute of limitations, for instance) isn't seen as positive on boards by ramsey-ites.

Good luck!

 

[denisegold]

Get a recent copy of your credit report FIRST (all 3 companies)- this is free once a year. (do not pay for this service).

When you get your money, and are going to pay your debts, DO NOT pay until you get it in writing that they will remove the bad info from your credit report. Get it in writing first!! They will say anything to get you to pay, and they will rush you. Take your time, and do it right. Get one of Suzi Orman's books, and read it through.

Pay off the debts that are reflected as "bad debts" on your credit card first. I wouldn't suggest you pay off your car loan (unless it's at a really high interest)- just keep your payments current- that keeps your credit score- to show you are paying your debt on time. Paying it off early is kind of neutral- not good, not bad.

 

[PinkRhombus]

I agree with how others have talked about going about paying the collection agencies, but if you have enough to pay off your car loan, pay it off.

You want NO debt.

Then stash the rest of emergencies...don't blow it all. You have no idea how many people I've come across that have done that. They all regret it later.

Make up a budget on what you have in monthly income, including some into savings, and stick with that.

 

[dms520]

Thank you all for the advice when I get the money I'll pull the credit reports and start from there.I know a girl at work who has the Suze Orman book so I'll see if I can borrow it from her. Again Thank You