credit question

[750reachfor850]

Exactly what is PFD and how does it help to improve your scores ?

[DCole3g]

PFD better known as pay for delete is when you negotiate with the creditor to delete their negative information or the tradeline as a whole from your credit report in exchange for you paying your debt. It's beneficial because that negative mark is removed from your credit report and will generally increase your credit score.  The less baddies the better.

[750reachfor850]

Learn something new again ,never know that could be done , so gratefull !!!!

[HoldingOntoHope]

Well understand that not every creditor will agree to do this. But it is one tool to try in our arsenal when we are attempting to clear up past credit mistakes. It is better to try and negotiate a PFD before simply paying off a collection. If you have negative accounts that are already paid then a goodwill (GW) letter or phone call is the thing to try. The Rebuilding your Credit forum has a lot of information to help.

[BearsAndTurtlesRtheBest]

+1 I didnt know this either, but if your un-piad collection is about to hit the 7 year mark is it ok to just wait for it to fall off?

[guiness56]

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@BearsAndTurtlesRtheBest wrote:

+1 I didnt know this either, but if your un-piad collection is about to hit the 7 year mark is it ok to just wait for it to fall off?

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You can, yes.  But after it is excluded, I would at least offer a small settlement to get it paid.  Unpaid debt never goes away.

[BearsAndTurtlesRtheBest]

Its only for $285, how does unpaid debt never go away?

EDIT: My parents never noticed it and has been on my dads CR since Sep. 2007. Its a medical collection

[RobertEG]

The FCRA mandates that adverse items reported to a CRA must be excluded from credit reports they issue after certain dates, depending upon the iitem of information.

Collections and charge-offs, for example, become excluded after 7 years plus 180 days from the DOFD on the OC account that created the debt.

Credit report exclusion of, for example, a collection means that others pulling your CR after that date wont become aware that it was placed for collection, or be able to ascertain the status of the debt from simply seeing an unpaid collection.  However, that does not mean the debt is satisfied.  It is a partial shielding of adverse history, intended to remove the adverse item from ready view and credit scoring.  The fact that the debt remains unsatisfied can still be ascertained in different ways.

A potential creditor can still simply ask if you have any unpaid, delinquent debt.  Credit report exclusion of a collection that was reported along the way is not basis for stating that one has no delinquent, bad debt.  Or, one reviewing your report could, by reviewing the OC account reporting, and seeing no indication of any reporting of satisfaction of the debt, ask as to the status of the debt.

Relying on credit report exclusion of adverse items that were previously reported does not ensure that the unpaid debt will no longer be known, and thus become a consideration in future endeavors for credit.

There is still benefit from paying any unsatisfied debt.

[BearsAndTurtlesRtheBest]

Okay so once you pay it off it wont reset the clock to 7 years.

[guiness56]

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@BearsAndTurtlesRtheBest wrote:

Okay so once you pay it off it wont reset the clock to 7 years.

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No.  The 7 years starts from the DoFD.  Period. 

It never goes away because they can still attempt to collect.  The debt is still owed.