Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Paying Your Bills
Profile Image

Question By
AnthonyB2015

0 Contributions
0 People Helped
Should I take a personal loan to pay off my car and collections account?
I have 2200 left on my car and 5000 left in a collections account, the collection is from a premier credit card I had to stop paying years ago. I have roughly $700 in credit card debt all current, my car payments are also current. I would just like my score improved so I can eventually buy a house. Is a personal loan right for me? I have heard you shouldn't pay debt with debt but I am much more fiscally responsible now and would like all my overdue debts (collections) paid.

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
5038 Contributions
1134 People Helped

You say this debt is years old. How many years? Remember that charged off accounts and the collection accounts will only remain on your credit reports for 7 years and in many states the Statute of Limitations to be sued for debt is much shorter than that (check the SOL in your state to be sued for debt). If you do decide to pay the collections, make sure you try to get a "pay for delete agreement" prior to paying so the collection account is removed completely and not just marked as paid. Typically paying old collections does little to benefit you unless they will be removed in exchange for payment. I doubt that taking out another loan is a good idea, but I really do not know your situation so my opinion on that really doesn't matter, but I would focus on paying off the $700 of current credit card debt and getting the auto loan paid down and if you cannot afford to do that, then you definitely cannot afford another loan payment.

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.