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I Screwed Up My Credit When I Was Younger. Now I Want to Buy a House. – Mark

“Dear Steve,

Steve, when I was 22 I signed up for a credit card and treated it like free money. I signed up for 2 more over the next few years and maxed them all out. I racked up 20k in debt and paid the credit card companies $100/card a month until I just got frustrated and behind and then stopped paying them.

I now am an adult, 32, and have two children. My wife and I can’t buy a house because of my credit. I have 20k+ in collections now because of my stupid move to stop paying my cc bills so we can’t even get pre-approved for a house. My wife and I make 125k(combined)/year and yet we live in an apartment with my daughter. We have some money put away(15K) along with a my 401k (30K).

How can I get my credit score up and not have to wait 5 years?

Mark”

The Answer

Dear Mark,

Don’t worry. We all make dumb mistakes at times.

So the $20,000 in collections is from ten years ago?

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If not, when did these accounts go delinquent and what type of accounts are they. Additionally, what state do you live in?

Have these accounts been sold to another company or is the original company trying to collect on them?

What kind of current credit accounts do you have that you have an on-time record of paying?

I feel confident we can get this situation headed in the right direction, I just need some more information.

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Mark

    So the $20,000 in collections is from ten years ago? No I havent used a credit card for about 5 years. I stopped paying them about 2 years ago.

    If not, when did these accounts go delinquent and what type of accounts are they. Additionally, what state do you live in? About 2 years ago. I live in Massachusetts.

    Have these accounts been sold to another company or is the original company trying to collect on them? I believe they have been sold. I keep getting calls from debt collectors but I am not sure on each card.

    What kind of current credit accounts do you have that you have an on-time record of paying? I have paid all my bills (electric, gas, cable, car and rent) on time. I just have credit card debt.

    Thank you so much,

    • http://GetOutOfDebt.org Steve Rhode

      If you stopped paying them two years ago then they will be reported on your credit report for five more years. MA has a long statute of limitations so unless you take some action to discharge those debts it is possible you can be sued for them for a long time. It’s a gamble you’d have to take if you did not want to deal with the past debt now.

      I’d hate for you to ignore the past debt and then you get sued right before you try to buy a house. That would scupper everything.

      The more logical initial approach would be for you to consider settling the old debts using some DIY approach that won’t cost a lot of money. You have the cash on hand to settle these quickly so you are a good candidate for this. I’d suggest you look at the services from Consumer Recovery Network, Debt Relief a la Carte or ZipDebt to see what I’m thinking about.

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