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swayman2202

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Conflicting information, do I pay off my collections, banks, credit cards or not?
I have been reading the forums and I am not sure where to start or what to do. My husband and I want to buy a home. However our credit is poor. We want to start paying off credit cards that have been closed, old bank accounts, 2 repossessions, and a few collection accounts. Except I read in the forums that paying those off doesn't help the credit score at all. And actually restarts the 7year waiting period that it takes to have bad credit dropped from the report. What do we do?! I have no idea how to manage credit but I need to learn.

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Since you said you do not understand credit, please look on the left margin of this page and begin reading the articles.  They are very easy to understand and explain credit very well.  This will help you to understand credit much better. 

Another thing to look ujp is the Statute of Limitations for Collections.  The time varies in all statesso find what it is in your state.  Then look up the information on when the debts would fall off your credit report and that might be shown on your credit report.  All debts fall off in 7 years.  If any debts are beyond your state's SOL but have not yet fallen off,let them ride.  You only want to pay debts that are still legally collectable and even those you want to try negotiating a "pay for delete" agreement.  This will require some letter writing (keep copies from both sides for your records) and send via 'snail mail'.  You need to get as much of the negatives as possible cleared up, build more positives and then you may have the chance to buy a house.  That is one major purchase you want to get the best interest rate on, and that can only be done by building your credt score.

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Paid negative accounts are not much better then unpaid ones, but many mortgage lenders will require you to pay off any negative accounts. The best way to handle negative accounts on your reports is "pay for delete agreement". Do some reading on that. Paying an old account does NOT restart the credit reporting time period. Spend some time reading and feel free to ask your questions along the way on here.

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