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jckmuzak

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Debt collection question
I have 3 collections not paid yet, my credit is poor because of this and missed payments. I have a plan to rebuild my credit back up, but may not be ideal to a logical person. I was going to take out a personal secured loan, putting my car title as the lien. It will pay off those collections, and I make monthly payments. I know that this will not be purged off my report, but will show as paid in full. The interest is at a ridiculous 24%, but I figure I can get this paid off within a year (or less), instead of the 4 year term they given me. I did recently get a secured credit card, to help with rebuilding my credit as well, but I want to buy a house within 2 years from now and this is why I was thinking about doing this. Should I go this route, or should I not take the deal and do this on my own?

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Top Contributor
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Not logical thought process!!

Why would you want to risk losing your car (a very real possibility) to pay off wjhat I presume may be credit card accounts that went to collections??  And to voluntarily pay such an obscene rate of interest on that loan when the collection accounts are likely lower??  NO!!!

Even if the collection accounts are paid in full, the negatives that come from their having been sent to collectioins will show on your credit report for 7.5 years, since that is the reported credit history.So, you are not likely to be able to buy a house in two years no matter how much you want to.

Please read the articles on this site (go to the left side of this page for the listing) and use the financial tools provided to help you LEARN how to build a good credit score and to maintain it so you may eventually be able to get a house.  Until you learn these skills (which is why Credit Karma is here) you are likely to keep repeating the same mistakes and never fulfill your dream of owning a home.

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