riseandrise

If someone had a gun to your head and was forcing you to purchase a vacuum for less than $100, which would you choose and why? Or is there really no difference at the lower price points?

I've been working on my credit recently and it turns out there's a lot you can do on your own! I highly recommend the "Rebuilding Credit" forum at myfico.com. Lots of people with helpful advice. Anyway, I'm no expert, but here are the steps I followed and had a lot of success with:

• Pull your free credit reports at annualcreditreport.com. This will give you the information on who owns your debt now, and you need that if you're going to fix it! Also, see if there's anything on your report that doesn't belong to you. If you see a debt you're sure your not liable for, dispute it with the credit bureaus. If they find you're not liable it will be removed from your report.

• Do some research on the debt verification process and debt verification letters. Before a company can collect from you, they have to be able to prove 1) you owe the debt, and 2) they own the debt. Verification requires paperwork and often the collection agencies don't have it, or can't provide it within the allowed 30 days. If that happens, congrats! You owe nothing! I feel like this is a good possibility for you based on the details you gave. But if they do verify or the process sounds like too much of a hassle, skip to the next step.

• Decide right now if you're willing and able to pay the full $700 to make the problem go away. If you are, things become fairly simple. Very important: don't pay the debt without speaking to the collection agency, and when you do speak to them don't let them talk you into making a payment! You are not calling for that. Your collection will be on your report for 7 years whether you pay it or not. A promise of payment is your only leverage to get the collection off your report.

• Speak to the collection agency but only as much as you have to in order to get your account number and their mailing address. Then you send a "pay for delete" letter. Look them up, there are lots of templates, but basically you say "I'll pay this immediately in full if you promise IN WRITING that you'll remove the collection once it's paid". Always get it in writing. It's very hard to hold them to anything said over the phone even if you record it. This has a very high rate of success.

• If you can't afford to pay in full, offer to "settle for delete". This doesn't always work but oftentimes the agency paid pennies for your debt so any money they can get out of you is worth it.

All of this worked really well for me. I got one random $50 collection that was killing my credit off through debt verification and my scores went up approximately 30 points. I also learned the best types of credit etc. to raise my score through the MyFico forums. It's really exciting to see my scores go up and know I did it myself :D

Whoa, that was long. Sorry. But seriously look into it. All it costs is a little time. Good luck and lmk if you have any questions.

This is the most important question in the entire AMA.