I have a poor credit score, 597 to be exact. I'm 23 years old and looking to purchase a car but of course I want to get my finances in order. The only 2 major hits I have on my credit reports are from cellphone bills left unpaid that were sent to collections and thus listed on my credit report. Totaling about $1,100 all together, I have that money and I'm actually looking to pay it all off but I want to know is it a risky move for me to contact the collections agency myself and take care of it or would it be best for me to go through a debt counselor? I'm not looking to eliminate the middle name, I just want to make sure I only do what's necessary.
If you can pay it then there's no need to involve a credit counselor. After all, their main role when you use them is to negotiate payments with creditors so you can pay off your debts. In this case you have the funds to pay, so why make it any more complicated than it needs to be?
To be honest, a 597 score is going to make it tough for you to find auto financing. Whatever options you find, they'll charge pretty steep interest rates and have high payments because they'll keep you on as short a payment term as your finances will allow. I would strongly suggest that you work on improving your score for awhile before trying to buy a car. If you can, buy a car for cash. You might not get much, but it will solve your transportation problem while you work on resolving your credit issues.
Using a credit counselor won't have any impact on your credit score as far as the debts are concerned. What will make a difference is not having them show as open collections, which is pretty bad. You'll still take a hit for having gone to collections in the first place, but paying them off will mitigate at least some of the effect.
I hope this helps.