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Posted in Credit Report
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Question By
mliubkin

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0 People Helped
Need help cleaning up credit reports and strategies for credit management
Hello,

I'm new to creditkarma and need your help, advise and effective strategies for cleaning up my credit reports, using credit wisely to help repair the damage and increase my credit score. About a year ago, I wasn't very bright with several department store cards, and let them be charged-off, and consequently be sold to collections. I was also late in payments to my two remaining active accounts. As a result, Transunion is reporting 9 negative accounts - 2 late payments (30 and 120+ days), 3 charge offs and 4 collections. I also have 2 hard inquiries due to apply for credit cards that are within the past 2 years. Per creditkarma, my Transunion score is 606 and my Equifax score is 576. My FICO score is 579.
In February 2016, I contacted all of the collections agencies and made 6 months payment arrangements with them, asking them to report the accounts as "PAID IN FULL" once they are paid off. Some agreed in writing, others said they would send a letter to me instead of the credit agencies, once the accounts are paid in full. I made 3 out of 6 payments so far, and have also paid off the balances on my active credit card accounts in full twice in the past 2 months. I've also hired Lexington Law and and had them challenge all entries. So far, they were able to remove 1. I've also sent out letters to credit agencies and creditors regarding inquiries, asking them to validate/remove. This was unsuccessful, as they proved the validity of inquiries.
Since signing up for creditkarma last week, I've learned that merely paying off a collection or charge-off has no impact on the credit score and does not improve it. I also learned that there is a remote change to convince collection agencies to accept "pay for removal" agreement, but it's very difficult, since they are not obligated to do so. I have contacted a few of the collection agencies and attempted to talk to them, but they all refused.
I'm now not sure what the right plan of action is, and need your help.

Question: Should I continue paying off my collections, even though it has no impact on my credit score and they are continually reporting to the credit agencies? If yes, what is the incentive? If no, should I use this money to continually pay off my revolving credit card balances monthly in full, as well as pay more towards my student loans and car loans?
Also, I need your help with effective strategies for:
A). Cleaning up my credit report
B). Improving my credit score
C). Using credit wisely (long term)

Anything you can contribute is greatly appreciated. Thank you in advance.

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