Better to request payment plan, or lump sum payoff to collectors?

I am waiting for my credit reports to arrive in the mail, and know there will be some bad marks on there with some outstanding debts. I am trying to rebuild my credit currently, and know it%26#039;s a long road. I don%26#039;t have credit card debt, but do have unpaid bills (hospital, cell phone, utilities, gym membership, etc).

I am planning to write letters to each bill collector, via Certified Mail requesting a %26quot;pay for delete%26quot; agreement (as I have read here numerous times)....but should I ask for a payment plan, or a smaller settlement amount? Which would look more favorable on my report for paying off the debt?

I plan to pay off the smallest amounts first, and then work my way up, rolling the amount from the small debt into the larger one. Will the bill collectors/creditors come up with a decision for a payment plan, or is that something I have to request to them in the certified letter?

Better to request payment plan, or lump sum payoff to collectors?

First, understand that when you pay off a debt, they are only required to update your credit report to show the debt is paid, settled, or whatever you agreed on.

But note that all of the information about late payments and collections will will still be there, and they will continue to be negative items. True, if a creditor actually looks at your report and sees %26quot;paid%26quot; it may impress them, but score wise it will still cost you as much as 100 points.

You MUST get them to delete the items.

Now, you will have a much better chance convincing them to do this if you pay the entire amount at once. But try negotiating first. Offer payments, and try to get a lower balance settlement. They may accept it PLUS delete the items. But work your way up, don%26#039;t pay more then you have to.

Read my past answers for more advice on what should be in your negotiation letters.

Better to request payment plan, or lump sum payoff to collectors?

I used a credit counselor. There are lots of them out there, but only use the ones that don%26#039;t charge a fee. They negotiate with the creditors according to how much you can pay.They can usually do a much better job at negotiating than you can.

Try this place. It only charges a fee if you are declaring bankruptcy and that fee is only $50.00. Otherwise, it%26#039;s free!

http://www.cccsatl.org/index.asp?_method...