Should I make payments or just pay it off?

I'm saving money to purchase a house in April. there are about 7 negative things on my credit report. my score is 502 (which is awful). I have the money in full to pay off my debt but the damage has been done to my report and score so should I settle with the collection agency or should I pay in full?

also, would it help to dispute items on my report? I admit, I owe all the money, except for some interest rates and should I go through a debt consolodation company or just do it myself? I heard that these companies can raise your score doing the same thing I would. if that is true, I rather go through them.

If you opt to settle, see what you can get in exchange. Some companies are willing to fix some stuff. Others will not. If they're willing to clean up their tradeline in full for full payment, make the agreement. But no matter what you do, get it in writing. It's a no-go if you don't - trust me. The thing about going through a debt consolidation company is that they may have some weight with the creditors because they do this on a regular basis. If they're not willing to work with you, then weigh your options. Also be sure that if you're going to pay them off, whether by settling for less than the full payoff or in full, that they agree (again, in writing) to specific actions. This is because if you make a payment and they don't do the right thing, the tradeline stays on your credit report for seven years from the time that you last paid so it could elongate the time that the bad history stays with you.

Another thing that I was thinking about is that some of your debt may have been sold and the new company's tradeline is different than that of the original creditor. Meaning that no amount of negotiating with the new debt owner will fix what the original creditor is listing. Which, if they sold the debt, should read: Paid/Close, Transferred To or Purchased By Another Lender. If any of your debt has been sold, the companies that buy these buy for less than the debt is worth and then will go to any lengths to make their money. They will not hesitate to get a judgement against you. The good news is that many of the companies that purchase debt don't create tradelines on your report unless they get the judgement.

One more thing, do review your credit report in detail and verify that nothing is incorrectly reported. It is common for errors to be made because each credit bureau's information is documented differently and there could be coding errors. If anything is incorrecly reported, dispute it via the bureaus routes.

I know all of this because I respond to credit disputes as part of my job with a finance company.

Someone mentioned waiting because they think the prices of homes will drop more. They will not drop too much more. The reason that the interest rate dropped recently is to stimulate the market and get people into houses again. Another factor is that many homes are in forclosure for large loans with little or no equity.

Someone suggested a credit attorney stating that they can have things removed from your credit report. Although this party may know someone reputable, be leary of credit repair agencies. Certain agencies charge you money and then spend their time mailing letters to creditors demanding debt validations. All this will do is cause the company, that you owe money to, to respond with a standard debt validation letter and it will include a copy of your agreement and payment history. I deal with these regularly also. We simply respond three times with a regular letter then, when the fourth request comes in, we respond with a final response unless proof that we made an error is provided. If we receive any further requests, we just file them away because we already sent a final response.

I want to be honest with you, so please take this as honesty and genuine concern from someone who's never met you so doesn't mean this personally....

Now is not the time to buy a house. You're probably going to want to wait for at least another year or two. There are just too many higher priorites in your financial life right now. Furthermore, as the real estate market continues to collapse, you'll get a much better house in 12-24 months anyway for the same amount as you'd spend on a worse house today. So wait... please... or you'll never get ahead.

And while you're waiting...

1. Get on a strict budget if you're not already. Force yourself to save 25% or even 50% of your income if possible. To do this, cut out every extravagance in your life (TV, internet, cell phone, going out) for as long as you can stand it.

2. Use that money and pay off all your outstanding debt problems. PAY OFF ALL YOUR DEBT IN FULL AS SOON AS YOU CAN. Don't dispute the debt. You just admitted there's nothing to dispute. PAY IT OFF AND MOVE ON.

3. Once all your debt is paid off, take that money you were using on debt and SAVE IT! You can get a mortgage with bad credit if you have 20% to put down VERY EASILY.

4. Now that you know how to save and live within your means, keep doing that and pay off your home! Imagine how great life will be without a mortgage and a free place to live every month!

Pay off your debt. If they sell your debt to a collection angency
for, say 60 cents on the dollar, knowing they are not going to
get any money out of you. You will end up paying more, and
will be hounded forever. This is the computer age. and they
will find you.
It has been proven on the news, that consolidation company's
end up taking your house, because that's what is your
collateral. so don't make it worse than it is. <}:-})

Ask before you pay out if your bad credit history will be taken off record if you pay.
If they say no just make regular payments.
If they say yes then pay it all out.
A good credit history is money in the bank!

Here's what you should do, since you have the money, you may as well not waste it. 1st you should contact a credit attorney, they specialize in removing bad items on you credit report. They will go thru your credit report and dispute all the negative items on you credit report. 2nd you can call the creditors and work out a deal to basically pay back the original amount you owe w/out all the fees and interest, which would save you money if you did decide to go that route.
I have friends that own a mortgage company and that's how they get some customers rating to go up. Otherwise you would wait years for that stuff to drop off, even if you do pay it all off.
Here is just one site: (i would definitely use it myself if I needed it, I've recommended it to several friends, and you score will definitely improve)
http://www.creditattorney.com/

depends on how dependent you want to become on credit. if you can go without it, then go without credit. get out of debt as soon as you can and stay out of it. definatley try to come to settlement with everyone you owe. most will likely lessen the amount due just to get rid of you. do it all yourself but if you must, be very wary of what consolidation company you choose. a lot of them simply act as, "accountants". they only make your payments for you at a fee. and if that fee isn't paid, they dont' disburse the payments and your credit is affected. not only would you be late to one creditor, you'll become late to several.

bottomline, if you have the money to pay your debt in full now. do exactly that.

BEFORE YOU DO ANYTHING!!!! Listen to Dave Ramsey's radio show. Call in and he will help you do the best thing for your situation. Go to www.DaveRamsey.com to get the time slot. Believe me, it works and you will not have to do it the hard way. Good Luck

Pay it off and make the credit company remove it or put it in good standing and re-evaluate your credit score!
With that score you will not get a loan, most loan companies on a home loan want a score of around 680.

MAKE A FEW PAYMENTS TO BUILD BACK UP YOUR CREDIT AND THEN PAY IT OFF, PAYING ON TIME IS A BIG FACTOR, DONT BE LATE

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