How to Pay off collection account correctly

[sam012]

I had an adverse reporting to CA from Macy's for 208.00 charge off, closed date of 7/11.  Went to ACB Recovery, who has an inquiry on my CR.  Now I get letter in mail from LTD Financial offering a payoff and release from bill for less than total.  LTD did an account review inquiry.  Not sure if these two companies are related or ACB sold to LTD and both are still trying to collect. I will pay total bill to get this taken care of but I would like this to be cleared from my CR so score will go up.  What is the best way to do this?  TU score now 662.  FAKO experian score 741.  Big gap with these two numbers.  I would like to get best rate on car loan soon.  Thanks in advance for any help.

[taskforce971]

I would start with narrowing it down to who actually owns the debt at this point. Once you figure out who legally owns the debt you should start by offering that company a PFD (pay for delete) agreement. Collection agencies are never easy to deal with but at the end of the day they realize that when they buy debts for pennies on the dollar and they get a consumer who is willing to remit the balance in full the profits are enormous. Another point I should bring up is the reporting of the original creditor, although you might pay the collection agency the full balance the OC's reporting will still hurt your score. Once you pay the CA write the OC a GW letter and hope for the best. It's unfortunate that the debt is no longer with the OC because a PFD that gets accepted by an OC has a far better impact on your scores. Good luck and keep the forum posted!

[sam012]

Thanks for your reply!  Should I contact the LTD by phone and ask them who now owns this collection? I am very leary of contacting them by phone because these folks re usually bad news.  Is it possible to have it open by both companies?  I called the OC and of course they would not deal with me then, which was months ago.  I do wish I could settle with them instead.  I am wondering why there isn't a line item from either of these companies, just inquiries so no way to have the OC amount cleared?  Will my sending them the money now do any good for my CR or will that bring the score down immediately?  Thanks for any and all help, new and just getting started.

[RobertEG]

Knowing who owns the debt is important, as it tells you who cannot pay. 

Who to offer a PFD is, in my opinion, more dependent upon whose reporting you want deleted than who owns the debt.  The party accepting a PFD can only agree to delete their own reporting.

In most situations, the collection is considered to be the more serious derog, and is thus the focus of deletion attempts.  Thus, PFD to the debt collector is usually the first approach, with OC deletion addressed by GW requests.

If the debt collector wont grant deletion, then a fallback, if the OC still owns the debt, is to PFD the OC for deletion of their reporting.

[sam012]

Ok, thanks.  I will then again contact Macy's and ask if I can pay them and if not, see which company has the debt and go ahead and pay them.  Will the payment bring down my score?

[sam012]

Update:  I contacted the OC and they say I can send pymt to them but they cannot change CR.  They also said I have to contact LTD Financial to get details on what's included in amt. owed.  I called LTD and they say they would have to request the details from OC and that they cannot do anything with CR because that is up to the OC, not them.  Is this all true?  Is my only recourse to get this balance off my CR is to send one of them a check and at least get a 0 balance on the CR?  Thanks in advance!

[gtnitright]

Were you successful in getting Macy's to delete your account?