Unfortunately the 999999's don't bode well for you...even if you only owe $120. Credit ratings have "codes" for payment that run from 1-9, with 1 being the best. Having 1's means that you pay at least your minimum payment, on-time, every due-date and have never been more than 30 days past-due. Other numbers, such as 5, mean you're in sort of a credit limbo...it means someone has given you credit but you're not having to make payments yet (like deferred student loans or when you get a retail credit card with "no payments for 6 months"). A credit rating of 7 usually indicates that you are working with creditors to relieve your debt, but that you have been seriously delinquent in the past (60+days). 9's mean that you went 90-120 days past due and the account is now in "collections" (they've probably sent it to a lawyer).
The problem with having 9's (and I know this from experience) is that it DOES NOT MATTER HOW LITTLE YOU OWE!!!!!! Creditors looking to extend you new credit don't care if you owed $120 or $120,000 (that's a little exagerated, but pretty much true)...all they see is that you are a credit risk and more than likely, will turn you down, even if you've paid the debt.
Here's what you have to do...you HAVE to take a pro-active approach to repairing your credit. It takes time, effort & patience, but it CAN be done...and you don't need to call any of the "credit repair" places to do it. What you DO have to do is contact the creditor that has given you the bad credit ratings and find out 1) how much you owe (sometimes the credit reports don't have the correct amount) 2) see if they are willing to "settle" with you for a lower amount (they may take less than the $120 just to get the account closed) 3) See if they will change your credit rating to at least a 5 or 7 (many won't but it's worth a try!) 4) Pay them & then have them send you a letter (on letterhead!) stating that the account is paid in full and closed out.
Then, when you apply for credit the next time (and likely get denied), contact the NEW creditor and ask to speak to a supervisor. Tell the supervisor the situation (you ONLY owed $120, and it's paid in full now) and fax a copy of the letter to him/her. This is how I began to rebuild my life 10 years ago (after getting shafted over $150 hospital bill that I NEVER received an invoice for...) and I now have PERFECT credit. I have platinum cards that have offered me $100K credit lines. This is partially because I'm in med school of course...but med school or not, they wouldn't offer that if I didn't have great credit.
Another way to help speed the process along is to get a "secured" credit card (if you don't already have credit cards in your name). You give the creditor a "deposit" in the amount of credit that you desire (so really, you're just spending your own money). If you make your payments on time, after 6 months to a year, they'll extend you a little credit beyond your deposit. If you keep this up, after a couple of years you'll have a decent credit rating and should be able to get a non-secured card through a "better" lender. Secured cards usually have outrageous interest rates...they are credit BUILDERS...do NOT use them to actually keep outstanding balances on them!!! In other words, buy yourself a magazine or something cheap about once a month just to keep the account active but don't buy anything that you can't pay off immediately!
Hope this helps!
