I have got about about $3300 in collection.
$1400 is from getting evicted about
$400 is from a time I over drafted a checking account
and the rest is medical bills.

Now I also have a auto loan for about $5000 with my Dad as co-signer.
I have made every payment on time for a year. I then refinanced it back to $5000 at the beginning of this year on my name as I wanted to establish credit history on my own.
However the payment history from when my dad was on the loan is no longer there.
It seems like this has hurt my score but I don't know why.

Now my question is what should I do to get my credit back on track?

Should I Pay all my debt as a lump sum and clear it all out?
I should be able to do so at the beginning of next year.

OR should I set up payments and pay them down over time?

Which way would help maximum rebound of my credit back?

  • 1
    Pay off as much as you reasonably can as soon as you can. The longer you make interest payment, the lower your chances of a credit score rebound
    – karancan
    Commented Jul 15, 2014 at 9:19
  • You need to continue to make monthly payments and show a credit history. It will take time but you have to prove you have cleared the error of your ways. At the year mark, it will begin to improve and improve more year or over year as you show on-time payments. Also once the collections is gone, it won't hurt your credit anymore after 7 years. It will hurt less and less as time goes on. Commented Jul 15, 2014 at 16:33

4 Answers 4


Your biggest problem is not that your credit score is dropping. The biggest problem is that you have $3,000 in collections. You need to get that settled as soon as possible. You need to find additional income, or a way to cut expenses so you can get those debts paid off.

Postponing payments until next year, for example when you get your tax refund, is not helping your situation. Starting now will get you out of debt sooner. The fact that you had a debt go to collections will have a negative impact on your score; still having a debt in collections will be even worse.


The important thing is to get out of collections as soon as possible. The longer you're in collections, the worse the effect is on your credit history. Do what you can to pay off as much as possible each month. Cut out all unnecessary spending (such as dining out, entertainment etc) and maybe find a secondary source of income until you have the collections paid off but don't postpone your payment just so you can do it all in one lump sum.


BTW removing your dad as a co-signer will have no upside on your credit long term. That was a waste of time, hopefully not money.

It hurt your credit because

  • you raised the principle back to $5,000
  • now you don't have a cosigner on that loan (Maybe)
  • You had at least one more maybe more credit checks done. (they take 2 years to roll off)

When paying of collections make sure you get a letter in writing that the amount you send is for full payment of the collection.

Register for CreditKarma it will tell you why your score is where its at and give you suggestions on how to raise it.


Paying off delinquent accounts as soon as possible will maximize your credit score. If you can do that, it's a no-brainer.

Your credit score fell when you refinanced because one of the inputs to your credit score is how long you have been faithfully paying down a debt. When you refinanced, you closed out one debt and started a new one, so your history is now very short.

Get current on any delinquent accounts (pay collections off). Any account that is not delinquent, like your car, continue to make regular payments at the usual amount. Over time you will build up credit again.

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