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Answers (6)
- Bob Willett, "SacRELender"
- Contributions:194
I would add DON'T pay off the medical bill. It's a crazy quirk of the credit industry that actually makes paying off a collection HURT your credit – at least initially. What others have said is true: old medical collections don't usually pose much of a problem, however if you pay off an old collection account, it can cause a problem.
Here's why: When you pay off a collection, that account will go from unpaid to paid. That's good! However it will also go from old to new because the "date of last activity" will be when you paid off the account. That's bad. Believe it or not, that "bad" is usually worse than going from unpaid to paid is "good." The net effect is negative.
After a while the account will become older, and since it also paid the effect will be positive. The problem is that may not be for a while.
- Geofrey Merino, "GMerino"
- Contributions:445
3 lines of credit would not be too much, just make sure you are able to make payments on time. There are several articles on MSN that demonstrate how to establish credit. Opening up credit card after credit card is not the way to do it. Consider a $500.00 credit line - you buy an xbox, camera, etc . . . for $250.00 pay the minimum payment for the next three months and then the 4th month pay the balance to zero. This will establish credit. We can go on and on with the best options to create a better score. The best thing is what you feel comfortable.
Geofrey M Merino
Geofrey M Merino
- TheJustin
- Contributions:2
Thanks for your replies.
As of right now, I have a credit card, which I keep below 30% of my limit, and a student loan, which doesn't require payments yet, but I pay anyway. Those are the only lines of credit that I have. I was considering getting a personal loan to assist in re-establishing my credit.
Would 3 lines of credit be too much? Not enough?
Patrick Nolan, just so I make sure I understand your numbers, and correct me if I'm wrong. But do they mean no balance more than 30% of the limit (or debt to income ratio) for the 24 months after BK...at the time of loan application?
Thanks again.
As of right now, I have a credit card, which I keep below 30% of my limit, and a student loan, which doesn't require payments yet, but I pay anyway. Those are the only lines of credit that I have. I was considering getting a personal loan to assist in re-establishing my credit.
Would 3 lines of credit be too much? Not enough?
Patrick Nolan, just so I make sure I understand your numbers, and correct me if I'm wrong. But do they mean no balance more than 30% of the limit (or debt to income ratio) for the 24 months after BK...at the time of loan application?
Thanks again.
- Hamp Yonce, "Zilluminati"
- Contributions:3463
The dam medical industry needs to get over the act of sending every account to collections, whether or not they have billed the consumer, have been paid, and/or both. They cause more credit grief than online gambling. Shame on the greedy bastards.
- Geofrey Merino, "GMerino"
- Contributions:445
Thank you, for your requestion. A collection account with that small amount will not affect you - if you paid it off great. The main things you want to work on is your credit report. If you haven't already established some type of credit you need to. The best thing to do is call a few lenders and find out the best way to establish credit. Everyone has their own style and opinion on how to establish credit.
Have a great night.
Have a great night.
- Patrick Nolan, "Bucks County Banker"
- Contributions:239
medical bill in collections ($116) that is paid off prevent me from getting a loan after bankruptcy?
My plan is to get a mortgage at the end of next year, but will this bill that was in collections prevent me from doing so? Or should I be all set? If not, is there anything I can do to get it completely removed from my credit report? Like I said, had I known about it, I would have paid it off immediately.
Thanks.
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