08-26-2013 09:04 PM
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.
08-27-2013 09:10 AM
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.
08-27-2013 10:30 AM
+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?
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.
08-27-2013 10:33 AM - edited 08-27-2013 10:41 AM
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
08-27-2013 11:04 AM
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.
08-27-2013 03:13 PM - edited 08-27-2013 03:14 PM
Okay so once you pay it off it wont reset the clock to 7 years.
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.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.