- Centurion Member
- Posts: 4913
- Joined: Sun May 20, 2012 4:35 pm
- Location: WI
I don't really understand - you say you have no cards, then say you have 4 cards with low balances and one with 1000 dollar balance in collections. Not sure what that means - are they all defaulted on and being collected on?
They fall off after 7 years so you have a few more years to go. Unless you can bargain for a pay for delete, where you pay them and they delete the card from your credit, your credit is still going to stink until they fall off. I'd be wary of "poking the bear" while these debts are still within statute as that could stir up the collectors to file suit against you while they can still sue you and you can't assert the debts are time barred.
If you open a credit card now, and there are some that would possibly take you, at a steep price and unfavorable terms, you risk putting them after you as well. I learned that lesson the hard way.
So you have a couple of options - wait a couple of years for them to drop off your credit and start over and hope no one sues you before the statute runs, or try to bargain with them to pay and get the tradeline deleted. Be aware that if you settle a debt for less than the amount of the debt, the IRS considers this income, and you could get a 1099 and have to pay taxes on the amount of debt you didn't repay (been there, done that).
Only you know what your circumstances allow. If you can easily pay these things I would try to bargain for full pay for removal of the accounts from the credit bureaus. If you Google "Pay for delete form letter" or some term like that I'm sure you can find samples that will do the job.
If that's not an option, I'd just wait for them to fall off and get your financial house in order before you think about buying a house. With what you've described, I'd say you will have to do some work for that house to be in your "near future". Possible but only if you can afford to buy your way out so to speak.