How To Pay Off Debts On Your Credit Report Correctly

Do Not Accept Settlements

While settlements look like a good thing on the outside because you can pay them off and get rid of them, in actuality, they’re terrible because they do more damage than good, and here’s why.

Future creditors do not want to see past creditors only got part of their money back. Imagine your friend asked to borrow $8000 from you but you told him you were only going to pay him $4000 of that back. You’d probably look at him like he’s crazy and tell him no. Well, that’s the same thing a future creditor will do when they review your credit report and tell you no. Future creditors will know when you make good on a loan or credit you receive, that creditor will mark that item as “Paid As Agreed”. However, if a creditor only got part of their money back, they will mark that item as “Settled” and since this is the last activity on the account, that “Settled” status can remain on your credit report for up to 7 years. We do not want this because it shows future creditors that they may not get all their money back adn they won’t want to have anything to do with you.

Do Not Speak to Creditors If You Don’t Have the Money

Don’t. Just don’t. I don’t care how many times a day they call you or where they call you. Work. Gym. Home. Wherever. DO NOT speak to them and here’s why. Making promises to pay them money you don’t actually have or can’t fully commit to will make the debt worse because then not only