Bad Credit getting back to Good Credit?

Ok right now I have a C.C. with a balance of $2,352 that is still with the card company and a Phone bill for $1,935 that has gone to collections. Yes these have been non-paid for quite some time, I hit a really ruff patch of life. I am now where I can try and negotiate with the Creditors on taking care of these debts. The C.C. was an original limit of $300 so I have racked up $2,052 in late charges, etc on it. Anyone know how low I might be able to negotiate a settlement to on this? I am sure I will have to pay the phone bill in full.
Now once I have paid these debts off I know my credit isn't going back to fantastic over night, I understand it will still take years to look good again. In this process though, Would the likelihood of a Credit Union financing me for a car be likely? I have heard that on the credit report it will still look bad but having paperwork showing them the debts are paid might help get the loan..anyone familiar with this or have any insight on the matter?

It's good that you want to address the problems you've had in the past with your credit, however when you negotiate, you open a whole another can of worms that might happen:

1. If you settle for an amount lower than what you originally owe, there's a possibility that the collector may go for the other portion.

2. Also if you settle, it can be reported on your credit as such with a "paid as settled", which still is damaging to your credit as if you didn't pay it.

3. Even if you pay it in full, the negative payment history from the account still remains.

The best course of action if you're going to negotiate would be a payment in order to get it completely removed from your report altogether.

Here's some links on what you should do to when it comes to negotiating debts.

http://www.creditinfocenter.com/debt/set...

http://www.creditinfocenter.com/debt/neg...

http://www.creditinfocenter.com/debt/Can...

http://www.creditinfocenter.com/debt/Act...


Even after you're sucessful in getting them changed to a favorable status, or removed completely, you have to start building positive credit to offset the negative credit history that you established. Remember it takes credit to build credit. One of the easiest ways to restart your credit would be by opening a secured credit card with a bank or credit union. A lot of the major banks (Bank of America, Wells Fargo, USBank, Orchard Bank) all offer secured credit cards to rebuild credit. Now granted, you'll have to use your own money for a deposit as collateral for a credit line, but this can work in your favor. Since the deposit is usually linked to a savings account, you not only gain interest on the deposit while you're building credit, you can also increase the credit limit by adding to the deposit. The higher the limit you have, the better it looks when it reports on your credit since 30% counts for having a a cushion between the amount of debt you owe versus the available credit. A good way to use a card like this would be to make a small purchase that can be paid off in full, on time, every month while adding to the deposit to boost the credit limit. Usually after a year or so of doing this, either the card converts to a regular one or a better card's offered. And more importantly, the deposit is no longer required and you get it back with interest.

Financing a car wouldn't be a good idea especially if you don't have any positive credit established. It's not impossible to get financed, but be prepared for obscene interest rates and a astronomical down payment. So, be patient work hard to clean up and rebuild your credit!


Good Luck!

Look for answers at creditboards.com/forums you will get a lot of answers there from people who are and have been in your situation. There is no selling on thier site its just informational.

This is where it gets complicated. You could pretty much settle it out for whatever amount you want to pay lower than the current balance on u'r cc, but it still might drew a negative impact on u'r credit report. Your credit worthiness is what the lenders rely on when it comes to getting an approval on any kind of loan. I hope this helps....

www.easycreditfixinfo.com