Question:
Dear Steve,
Several accounts past due on my credit report due to some medical problems last year. Trying to raise my score by 30-50 points to obtain a home loan.
I have approximately five accounts with minimal balances that for some strange reason, I stopped paying all together last year. Please do not judge as it was a tough time for me mentally and apparently I had a mental break down when paying bills. I kept up with my larger bills, rent, daughter’s student loan, furniture loan, car payment, etc., but let the little ones go. I know that I should have turned to family or to the creditors for guidance, but I didn’t and I cannot go back. Will any of these creditors work with me now? Or should I just resign to renting for the next seven years while I straighten these issues out?
Cindy
Answer:
Dear Cindy,
No judgment here. Stuff happens and I totally understand.
You don’t need to give up and this should be an easy process to deal with.
This needs to be a two front approach. No only do you need to deal with paying off the old debts or coming to a settlement agreement with the current debt owners, but you also need to make sure there is good credit being reported about you.
Often times when people run into situations like this they give up on using credit all together. But it takes the current demonstration of good credit use to help life your score up even further.
I think CreditKarma.com has a really good credit score modeling tool that shows you exactly how different things you can do will adjust your score. It’s free to use on their site.
You can read my free credit repair guide.
This should not take you long to accomplish the results you are looking for. I would pick the lowest old debts to chip away at first. Just make this a process to follow, rather than feeling overwhelmed, and this will soon be behind you.
Don’t forget to have good open credit being reported about you and pay particular attention to keeping your balances bellow 33% of your total credit available on those accounts.
Big Hug! 
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