November 21, 2017
 
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How Help with Old Bills is Possible

Dealing with Old Bills Still in Collections
With the exception of bankruptcy, the worst entry to have on a
credit report is an account in collections. It will ruin your credit score and make it nearly impossible to qualify for new credit. Creditors will know that you haven’t paid your bill for quite some time, which makes you a bad risk. This also means you’ll pay more to do business—compared to someone who has a good credit score—for a mortgage, insurance, and other credit. If this sounds like you, your main focus should be to improve your credit score and give the credit bureaus a reason to legitimately update your credit report with “paid as agreed” or “current” next to any of your accounts in question.

Paying Old Debts
If you’re able to pay off an account that has been in collections, the best case scenario is to pay off the balance in one lump sum. It’s easy and gets it over quickly. Before sending in the check, contact the collection agency in writing to negotiate that when the account is paid, they will update your
credit report by either removing the entry entirely or noting that it was “paid in full.” If they agree, get it in writing so you have proof of the arrangement. In the case where you have to make payments, write a letter stating the amount you’ll pay each month, in addition to the request that they update your credit report.

 

Some collectors may refuse to remove an entry from your credit report even when you have made payment. In this case, you’ll have to be happy with “paid in full.” It will still be better than the situation you were in, credit-wise. 

Credit Counseling:
Non-profit credit counseling agencies are a good option for those who would rather have someone else do the negotiating. A reputable organization can do the work for you and make arrangements for repayment. They’ll keep your best interests in mind, evaluate your budget, and send your payments out on time every month. They can also help you with improving your budget and provide you with educational materials to keep you out of debt for good.

 

 

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