@Anonymous wrote:I have 2 credit card accounts that went into default and were sold to collection agencies. I tried to work out payment plans with the different companies before they went into collection but was unable to come to terms. All of my credit is spotless with the exception of these 2 items. The collection companies show me as being currently past due even though I am making payments to them reglioiously just like agreed. I just tried to go for a refinance of my mortgage and was declined due to these 2 collections and their effect on my credit score. My question is this, if I stopped making these collection payments won't the effect be the same? They are showing me currently past due and have for the past 2 years that I have been paying on them, with no end in sight (high balances and fees attached). I could use this money to pay down and/or off my current credit obligations. Any advice on what might be the best way of dealing with this.
Well there are some things to consider here the first being is did you give them a written promise to pay it off?? or are you in a state that allows the SOL to reset by just making a payment??? If so this may have reset the SOL if not then the SOL is ticking from the DoFD. All this has to do with their ability to successfully sue you for the debt. If they are updating every month then stopping isnt going to make a difference to your score if they are not updating every month then stopping could result in an update and subsequent score drop. Another factor would be how long this account has to go before its excluded from your CRs for reaching its max time negative info can be reported. Also I will say that a paid collection is always better than an unpaid on a manual review. I would probably try to come to some terms with them about how they are reporting it before stopping payments.
Welcome to the board 
@Anonymous wrote:Thank you for your response and information. I am a newbie at fixing credit problems and therefore I do not understand some of the terms you used, I.e. SOL, DoFD. Another question that I have regarding your response is the "amount of time that a negative item can be reported". Whatever information you could provide me with on these few items I would greatly appreciate.
SOL = your states Statutes of Limitations concerning defaulted debts
DoFD - Date of 1st Delinquency (This is the first 30 day late that ultimately leads to the Charge Off)
http://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/m-p/88458
The maxmium time a negative COed account can remain on your report is 7.,5 years from the accounts DoFD. For accounts that have lates on them that are still open or closed in good standing its 7 years from each of the lates.