Does anyone know the best way to clean all bad credit issues. credit card, loans, etc?
Answers:
I currently work in collections, so I see a lot of people who have quite a bit of credit card debt and otherwise.
The first thing you must find out is if your credit cards are in default or not. When a card is in default, the lendor then charges off the debt to profit & loss and it reflects as much on your credit report. This is the worst standing (barring a repossession or a foreclosure) that can be on your credit report, and will remain there for 7 years after the last known delinquency prior to the charge-off.
Once you find this out, the best thing for you to do is prioritize your bills, and pay the ones that are not in default down first, so that they're on time. This is extremely important as you do not get second chances once a card charges off, and it will improve your credit score as well once it does get paid off.
After that, what you will probably need to do is save up enough money to pay off one bill at a time IN FULL. Do *not* settle your debts as this indicates on your credit report as "paid for less than full balance" and you can also end up having to pay taxes on the amount they forgive if they file a 1099C form.
At this point in time, your debt may be sold off to another collection agency. I do not recommend dealing with these types unless you know for a fact that they OWN the debt. Generally, for the first year or so after a debt is delinquent, the original lendor/creditor still owns the debt, and if you can contact them, they may agree to a Pay For Delete (PFD) where you pay the balance in full, and they agree to remove the trade line from your credit report. If they do not agree to this, the best option is to pay it off.
Special note for student loans:
If you are delinquent on a student loan, as long as you do not have any judgments, you generally will qualify for a Rehabilitation. You will have to work out the specific details with either the Department of Education, or the agency collecting on their behalf. With a rehabilitation, the Department of Education funds your loan to a different facilitator (Sally Mae, etc) as you make 9-12 monthly payments to show to that facilitator that you can pay a monthly amount on time.
In return, you will have most collection fees removed, the same interest rate that you had (usually low), the loan will be removed from a defaulted status, you will be eligible for more student loans, and you will no longer be at risk for tax offset or wage garnishment.
I hope this helped and best of luck getting yourself out of debt!
just time, try paying all bills on time for a few months. Don't check your credit score too often, it goes down each time you check.
Best way is time. You can pay a little on each one until you can afford a loan to wipe all those off, and then have only one bill to pay.
But you must be patient and not add more debt until you get this under control. And if you have a partner, make sure that person's values include being debt free also.
Contact these folks.They've helped me tremendously. Good luck!
The only thing that cleans credit is time and paying your bills on time every month.
I quote from the 2007 edition of Consumer Action Handbook "There are credir repair companies that are advertising that they can erase bad credit for a fee. Don't believe them".
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