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It’s called, “Reasonable Assurance"
F Miami, 26 let’s talk 😉
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Whose at freehold for the happy hour?
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When you say you want to buy a place in the "nearest future," do you mean the next couple of months, or in a year or two?
If it's the former, pay off the debt and do nothing to incur more. You want your debt level to be as low as possible so that when the lender is evaluating your debt to income, it's as low as possible.
If it's the latter, do you mean you don't have a credit card, or you don't have credit card debt? If you have no credit card, I would suggest getting one and using it to build a more diverse credit profile (do NOT do this if you are planning to buy very soon). Pay it off in full every month. Do not "use" the debt and pay interest. But you'll build credit faster with a card than without it.
And also pay off the debt. You are almost certainly paying interest on it. There's no reason to pay it off over time when you can eliminate the debt completely and save money.
If you can buy a 2-family and live in half of it while renting out the other, that is a great way to build wealth. But know what you're getting into as a landlord. Repairs, maintenance, etc. can eat into your cash flow. Still, in this market it can be a stable way to build equity.
What you need to do is call all the collections agencies and see What lower payment they will accept for settlement when you do that sometimes it's lower than the actual amount you owe. Before you make any payments ask for 'A Pay for delete letter' so it can get removed from your credit profile. Next, try to acquire a credit-building credit card. Make sure reports to all 3 credit boroughs. Another credit-building tool is to find some one who is willing to add you on there credit profile as an authorized user. Your score should jump between 60 -120 points once your done..3-6 months
When my credit was low (500s) in law school, I actually did all of these options, and my score sky-rocketed (especially with the authorized user thing). I was around a 720ish in less than 2 years.
I had debt that went to collection agency. They said there is no pay to delete letter. It was paid but still on my credit as settled and paid. Impacted my credit for a while
Depends on the collection agency. I had that happen and they removed it after I paid it.
I’ll appreciate if you shoot me a dm
If you can afford it, pay it in full. When communicating with them ask them for a certified letter stating that the debt has been paid in full your lender will ask for it. Also ask them to remove it from your credit report. Otherwise you have to wait at least 3 months for it to reflect. If you ask them to remove it, it should only take a month.
We just went through this last year. It was a pain but worth it.