Is it worth paying off collections or using the money to get a secured credit card?

Question

I have about 4K in past medical bills from 2 years ago. Would it be worth paying them off, or put a deposit on a secured credit card to help inmprove my credit?

Answer 1

hmmmmmmmmmmm maybe baby

Answer 2

If you pay your bill that is the best indication if you are a good credit risk.

Pay them off and then apply for an unsecured one to get a better rate; or just get the h**l away from them.

Answer 3

Pay your bills off so it will not bring down your credit score.

Answer 4

As long as you have those unpaid bills, your credit won't improve much and even if you do get a new card, those bill collectors will continue to call.

Best to pay off the debt so you can start again with a clean slate and a clear conscience.

Answer 5

OK, now that the morality police have had their say I will put in my two cents worth.

There are only 2 times when it makes sense to pay old collections, the first is when they are about to sue you and get a judgment and the other is when you have a written pay for delete agreement in your hands.

The reason for this is twofold, first once accounts go to collections the damage has already been done second when you pay old collections they become current and actually bring your score down not up.

Also anytime you make a payment you reset the statute of limitations which is the legal time they have to sue you in court.

If you really want to pay these, good for you but do it the smart way and demand a pay for delete agreement in writing first, this simply says that in return for your payment they agree to remove the accounts from your credit reports like they were never there.

Make sure everything is done by mail certified return receipt requested.

Good luck.

Answer 6

Pay off what you already owe.  Nothing's going to get better until you do that.

Answer 7

Getting a secured credit card with a  legit bank is definitly a good idea to build your credit.  However, you credit score wont go anywhere without clearing up your old debt.  So sad to say, you should probably pay off your debt, or at least work out a payment plan for it(that will show up favorably on your credit score) and when you can afford it, getting the secured credit line and maybe even an unsecured one, if your credit has gone up enough.

Answer 8

Pay off your bills, don't get another credit card. Paying off your bills will help you improve your credit.

Answer 9

NOT paying the bill won;t make it go away - they can also sue you

Answer 10

use the money to get a new car and a handbag to match

Answer 11

Pay off the bills.

A secured credit card is a joke.  You send the company $500 and they send you a card that's got a $500 limit.  When you make a $100 purchase, they use $100 of the $500 you already sent them to pay for it.  Your bill is being paid with money you already sent them!  They're not taking a risk on you.

Answer 12

Pay off the debt! Don't get a credit card. You will end up in more debt. You can use a debit card, and you will only be spending money that you actually have. You don't need the credit. I have 2 car loans and am buying a house, and I have never had a credit card, and never will.

Answer 13

Well your credit will never improve beyond the collections that will just be sitting there for a while. You accounts are from only 2 years ago, so they are going to be there a minium of 5 more years. If you get a secured card you score will go up 1-15 points and then your collections will take it back down 50-100 points. Pay off the collections, see if the creditor(s) will do a pay for delete option and THEN get a secured card.