First Steps
One of the most powerful tools in a person's arsenal who is trying to improve the state of his or her credit scores is debt negotiation. Many times, it's possible to settle a debt for far less than the original amount and have it wiped off of your credit report, because the creditors would rather receive some money from you than none at all. This can be a vital companion to credit repair, if done correctly. However, care should be taken when undergoing this process.
One of the biggest surprises that pops up for those unsuspecting people who are new to the world of credit repair is that many of the collectors that may show up on your credit report don't actually own the debt any longer. Debts are bought and sold as a matter of course, and usually if you pay collectors money for the debt that they no longer own, they will keep it. Then you will receive an unpleasant surprise when you are still billed later on by the collector that actually currently owns your debt.
This is why before one begins any sort of debt negotiation as a part of their credit repair process, their collections should be taken a careful look at. If there are any questionable collections, they should be disputed immediately and reported to the credit bureaus. This makes sure that the older debts won't stay on your record, and you will know who to negotiate with in the first place. The next step is to take a note of what the default dates were originally for any legitimate debt that is owed, and then use this to figure out what the statute of limitation is.
After the statute of limitation has passed, the collection agency has no legal recourse to enforce collections. It is at this point that you hold all the leverage when it comes to debt negotiation, because the collector knows that you don't technically have to pay what is owed, so if they can get any money to be repaid at all you both come out ahead. Other factors can play into this as well, including how the industry is doing and how much the actual dollar amount of the debt is at the moment.
The most important first step to debt negotiation is simply to conduct some basic research into where your account is at the moment. If you need help with deciphering your credit reports, then it can be very helpful to utilize the services of a credit repair agency. They can help you narrow down your options and determine what your rights are.