Old debt when a minor

by Caroline
(NYC)

When I was younger (16-18) I applied for numerous credit cards. At first, I paid them religiously and always paid more than the minimal payment. After a while, I was left with no job and soon fell behind on my payments and eventually stopped paying. It has been a long time since I made any payments on any of the credit cards. I am now 25 and I've learned from my mistakes and have realized how important it is to have good credit! I just recently moved to NYC and to get an apartment was almost impossible because of my credit. I want to start working on my credit but I don t know what’s the best to begin to go about it.

I’ve read different articles on the internet that say different things. Some say I should contact the company directly. Some say that I should call the debt collecting agency.

My fear with calling the debt agency is that I will pay all my debt and will receive the news thousands of dollars later my credit remains horrible.

Any thoughts would be immensely appreciated!

Comments for Old debt when a minor

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Oct 05, 2010
cleaning up old debt
by: Gerri

Caroline,

I'm glad you contacted us before you try to start tackling this task. There are some things you definitely should know about old debts and your credit.

First of all, paying these old collection accounts will do nothing to improve your credit scores. Unless you can get collection agencies to agree to remove these accounts in exchange for payment, they will affect your credit the same way whether they are paid, unpaid, or settled.

You mentioned that you stopped paying on these accounts along time ago. How long? According to our resources the statue of limitations for most consumer debts in New York is six years. If you incurred these debts in another state, it's possible that the other statue of limitations could apply.

Also keep in mind that collection accounts can only be reported for 7 1/2 years from the date you first fell behind with the original creditor. So depending on when you fell behind on these credit cards, they may be scheduled to come off your credit reports in a relatively short period of time anyway.

So you're going to have to decide whether you want to pay or settled these accounts, or just wait until they come off your credit. I should mention that if you don't pay them, and the statue of limitations has not expired, you could be sued. That would place the new negative item on your credit reports (the judgement).

If you do decide to pay them, and you can't afford to pay them all, then you may be able to settle the debts for less than the full balance owed. Again, as far as your credit is concerned, it doesn't make a difference one way or the other.

I would encourage you to do two things.

1. Read our ebook Debt Collection Answers. It includes a section on dealing with collection accounts on your credit reports.

2. Listen to our podcast collections and credit reports podcast

We hope this helps!

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