Credit rating-can one black mark really hurt you?

I have perfect credit except for a default of 1200.00 on a joint account which i co-signed for a few years ago. at the time he was my fiance and he totalled his car and the insurance covered everything but 1200 bucks. i never received a letter about this debt-i discovered it when i pulled my own credit report. recently i have been harrassed by a credit agency that is threatening that i'll never be able to finance anything if i don't pay this money. quite honestly i probably have the cash but the thought of paying for one more penny of my deadbeat ex's debt (i paid off 2000 that was charged on joint credit cards)makes me sick. i think i'd almost prefer bad credit as long as i can still get student loans. does anyone know about student loans and credit? also, when does the 7 years start? from the time of the first missed payment? from the time something is 'charged off'? or the time something is referred to collections?

the ex in question still insists it's all a big mistake and that he doesn't owe anything. he has no money and terrible credit so i know he won't pay. i have considered taking him to small claims court to recover half of the money at least

Depending on how long the default happened, that could probably continue to be a problem for a long time for the next several years if you decide to play the waiting game and let the 7 year statue of limitiations for reporting it on your credit expire. But you have to ask yourself, "Is it REALLY worth it?" And when you're talking about trying to rationalize whether to have bad credit and possibly jeopardize your chances at furthering your education, then you might want to think again. You're really left with 2 clear cut options to get this off your back. Either bite the bullet, pay it off and be COMPLETELY done with the debt and your ex, or turn up the heat on your ex to take care of his business and clear that up. He needs to understand that you were down for him enough to co-sign, he needs to be a man and face his obligations no matter if you two are together or not.

Sorry, hun. This sort of thing happens to a LOT of people... it's always boyfriends getting their girlfriends to cosign. VERY FEW guys will cosign for a girlfriend.

That could pose a problem when trying to get a mortgage, but if you want to wait it out, you certainly can. The 7 years starts from date of last activity, but if it's gone to collections, it's 7 years since they first reported on your credit report.

If you want to buy a house pay it off. You did co-sign which means you guaranteed the debt. If he doesn't pay, they can come after you. It's one og those learn the hard way lessons sorry.

With charge-offs there are a couple of options to dealing with them. Many times creditors will settle for a lesser amount. When I deal with many of my customer's they have not just one, but multiple chargeoffs. It is my job to negotiate a settlement with these collection agencies. What you have to remember is that they purchase these debts for pennies on the dollar. This is why my initial offer to settle the debts is for 65% of the original charge-off. Nine times out of ten they accept.

You shouldn't prefer bad credit as long as you can get your student loans. Credit reports are one of the primary resources companies use to justify giving you money. It represents your risk when it comes to paying back the debt.

When or if you do decide to try to settle with the collection agency, make sure that they will either remove it from your credit report after it has been paid or they will mark it "PAID." Keep a copy of your receipt from the company showing that you have paid as well.

Some items on credit reports don't fall off in 7 years. It all depends on the collection agency. Your credit report will however show the late payments in a section that shows your historical delinquencies. Whether still on the report or not.

The moral of the story as you have already learned the hardest way of all is... Don't get joint accounts with anyone unless they're legally your husband/wife. You can get some more information from a website specializing in FICO scores and all information concerning them. http://www.myfico.com

Best of luck to you and the rest of your education.