[alex]

Late Payments a late payment doesn't show up on your credit card the day it's late but 30 days after the due date.

Reporting Over 30% of companies don't report any information or report inaccurate information.

Removal Disputing a delinquent account can cause derogatory information to be removed in at least 50% of the cases. The creditor only had 30 days to remove it and the time it takes to mail the responses count within that 30 day period.

Charge Offs a chargeoff doesn't mean the debt is gone but rather it's typically sent to an outside collection agency. You can typically settle on 20% to 30% of the principal amount.

Negotiations If you haven't paid a bill in over 6 months, you can more than likely settle on 70% and if in 12 months, most likely settle on 50%. Typically the creditor wont settle but the collection agencies will.

Extra Fees Don't be afraid of all the fees tacked onto credit accounts. Creditors often add those because the typical credit account is negotiating, virtually wiping out all the fees.

Removal of Bad Debt Whenever you settle, always make sure that when dealing with the collection agency, part of the settlement includes marking the account as current and paid in full. The collection agency works off of commission so if it gets you to pay, they will often agree to it, however, make sure you get it in writing.

Past 6 Months Your past six months of credit activity account for the vast majority of your credit score. While bad credit can stay with you for 7 years, credit is the basis of your last 6 months to 1 year, depending on the credit.

Stop the calling If you request in writing, the creditors may not call you other than to tell you that they are proceeding with action, at which point you can settle. If they do, they could be liable for up to $1,000.00

Authority Collection agencies have no legal authority other than the legal process. They cannot take assets or garnish your paycheck without going through the due process and more often than not, they have to sue you in your area.

Bottom line; always pay your bills on time, even if you can't make the minimum payment, pay something, even if it's $10. However, if you find yourself in a bad credit situation like many do either due to loss of income or something related, don't be afraid of the creditors. They are just people, doing a job, trying to collect something. Surprisingly, you will find that it's easier to settle and work with collection agencies which typically expect to settle on 20% to 70% of the original debt.

[Eric]

Bottom line; always pay your bills on time, even if you can't make the minimum payment, pay something, even if it's $10.

Excellent advice! I try to pay at least 4 times the payment due to stay ahead of the game.

[mann3r]

The advice i think is not to use credit cards, nice article though.

[Life Xpect]

The advice i think is not to use credit cards, nice article though.

I'am just about to order an online Cirrus DEBIT card maybe, i can't open a bank account with my own name considering i'am not legally 18 :(

[Dana]

Great advice, Alex.

Collection agencies try to use intimidation and scare tactics. Know your rights and try to negotiate whenever possible.

And...live within your means! Go back to the mentality of our grandparents who saved for what they wanted.
Paying for something in cash always gives you an advantage.
1) Sometimes you can negotiate a lower price when paying cash
and
2) If you pay for it in cash, you pay for it once (not for 3 years with 28% interest) and no one can repossess it because it's yours!

and....stay away from payday cash advance places. Once you start going to them, it's very hard to stop and you're not going to get out of debt for a LONG long time if you start down that road..

[Eric]

I buy a lot using my Paypal CC, but that's because I rack up the points and I pay it off quickly.

[HeadShock]

great advise alex, i have considered getting one, but its not worth the risk at my young age.

[Ajay]

Originally Posted by Eric

Excellent advice! I try to pay at least 4 times the payment due to stay ahead of the game.

Why 4 times the payment?

[rsxgamer]

Nice article but this is why I dont use creditcards

[mann3r]

Originally Posted by Ajay

Why 4 times the payment?

maybe partial payment?