Refinance Mortgage Tips
Any credit enhancement tips?
Currently I have bad credit and a low score due to a lot of mistakes I made in college. I recently was turned Down home mortgage refinancing. Yesterday I decided to contact all credit card company or delinquent phone provider on my credit report and began settlement negotiations. I went ahead and paid half of them. I do the right thing? I need to buy a new car soon and get my home refinanced soon.
Morally you do the right but not the best for your credit. Just pay off old collections will not remove the item from your credit report. The damage has already occurred. It will still be reported for the rest of the 7 year reporting period. Pay off old collections and other debts may actually hurt your credit score because it makes an "old" debt "new" with activity. This gets reported to credit bureaus and your credit score goes down for a while. A "paid" collection looks better to lenders than an "unpaid" and if you want to be able to refinance so you will most likely need these debts paid off. To improve your credit you have to negotiate a "pay for deleting "agreement with creditors, it means that in return for money they have agreed to completely remove the account from your credit report. If they agree get it in writing before mailing payment. Pay by postal order, never give them access to your bank accounts.