NYS 5 year rule - does it have to be paid in full or settled

[BuffaloBoy]

I have a $3,000 debt (was $1200 but increased because of fees and interest) that will be dropping off in August 2014. I want my credit to get going in an upward pattern BEFORE then so wondering if I should settle with them and have the NYS 5 rule take effect? Does it have to be paid in full or does settled work?

[guiness56]

2 of the 3 CRAs will, 1 says it has to be paid in full.  The NYS does not say that, it is just the CRAs interpretation of it.

[gaktheknife]

I have dealt with this personally. EQ and TU will easily drop a SIF. Experian is a different story. I battled with them for a couple of weeks but was succesful on getting a SIF dropped. Basically I went up the chain and gave them a copy of NY GBS law found here: http://codes.lp.findlaw.com/nycode/GBS/25/380-j.

[BuffaloBoy]

Thanks guys.

So is there any point in settling this debt right now? Or should I just ride it out? Will settling and it being dropped off raise my score?

[guiness56]

Is it a collection?  Depends on what else may be on your CR. 

[BuffaloBoy]

Yep, collection. Here are the 3 negatives on my report.

1) BOA credit card (this was sold to midland)

2) Midland Collection

3) Bank credit cart (30 days late)

Let me know what you think I should do. Thanks!

[guiness56]

It may.  Those first 2 may stop it from a good score bump.  The other is a minor derogatory.

The debt doesn't go away when it is excluded from your report.

[RobertEG]

It always make sense to pay a delinqueunt debt.

"Riding it out" by way of CR exclusion simply discontinues its showing in your normal credit report, thus making it more difficult for others to become aware of it.

[BuffaloBoy]

The first 2 are what im talking about paying off. Well the 2nd one actually (which is linked to the 1st).

[Andrew22]

Be CAREFUL. If this is collection, and you make an arrangement with them, it is possinle this can be reported as a new account with a whole new five year window...