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How/When/If I should pay off old student loan debt?

My first priority right now is improving my credit score. I'm in a position where I can pay off 100% of my debt right now. I'm just not sure about the best way to do that.

First, I have an old hospital bill for only $100 that I somehow let go into collections. It was last reported on 09/02/2010. Should I pay it? I've read that paying old accounts in collections can actually be bad for your credit score.

Also, I have about $2k of student loans in collections with the US Dept of Education. Should I pay it all of at once, or spread it out over a few months to improve my payment history? Which would help improve my score the most? I'm trying to find the website to pay them directly. I think it is but it seems that they're down.

One final thing: I've been trying to get approved for a credit card to start improving my payment history also, but I can't seem to get approved for one. Even cards that don't require credit checks and requesting proof of income. I do not work so technically I have no income, but my spouse is a physician so cash flow is not an issue. How can I manage to get approved for even the smallest of credit lines?

Thank you for any help!


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If you can Pay them all off now DO IT!  Don't Wait.   Do everything in Writing,   certified mail and keep copies for ever.

once you have cleaned up the past issues look into getting a secured credit card.

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You can check "Statute of Liomitations on Collections" and see what the time frame is for your state.  If the medical bills are close to that time, you can either wait them out or negotiate (in writing, via regular mail) a "pay for delete" agreement.  Check the articles on this site for more specifics on that.

Student loans do not disappear and, since they are now in collections, you'll want to get those paid of as fast as possible.

Since you do not have a job, your best option is to get a secured credit card for yourself.  But, frankly, you may not be able to get any if you do not have a source of income in your own name to pay for them.  Maybe you can be an authorized user on husband's accounts. That will show on your credit report.

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