Pay off collections or wait until it falls off? (at 6 years right now)

[Anonymous]

Very thin file as I never use credit.  Starting to build now, 1 secured card with Capital One that I just activated this week.

Reading my credit report, I have one item in collections for only 50 dollars.  It's six years old and so I assume it will fall off next year.  Am I correct?

I am a bit confused about what I should do to raise my score in regards to this collection.  One reason for confusion is that in the Capital One credit tracker, it says my oldest account is 6 years (I am assuming that the collections account is the account they are referring to).  Will my score then drop if I pay off this collection because then my oldest account will only be a month old?  Or will my score go up if I pay this off, and by how much?  Again, nothing else in my credit report, and nothing sould be there aside from my newly obtained secured credit card.

I'd like to avoid any discussion about ethics and paying a debt.  This debt is to a wealthy library that has more than enough funding, and certainly doesn't need the 50 dollars.  I just want to build credit in order to buy a house in the coming years. 

Thank you very much!

[Anonymous]

If its already 6 years old, and your only item, I would consider paying it ONLY if it was being updated every month.

Consider getting a second secured card now. SDFCU is easy to get, lots of people recommend BofA (I personally have issues with them and refuse to do business with them).

After about 6 months of good payment history you may start to see your score rise, and at that time consider apping for a couple of unsecured cards.

[gdale6]

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@Anonymous wrote:

Very thin file as I never use credit.  Starting to build now, 1 secured card with Capital One that I just activated this week.

Reading my credit report, I have one item in collections for only 50 dollars.  It's six years old and so I assume it will fall off next year.  Am I correct?

I am a bit confused about what I should do to raise my score in regards to this collection.  One reason for confusion is that in the Capital One credit tracker, it says my oldest account is 6 years (I am assuming that the collections account is the account they are referring to).  Will my score then drop if I pay off this collection because then my oldest account will only be a month old?  Or will my score go up if I pay this off, and by how much?  Again, nothing else in my credit report, and nothing sould be there aside from my newly obtained secured credit card.

I'd like to avoid any discussion about ethics and paying a debt.  This debt is to a wealthy library that has more than enough funding, and certainly doesn't need the 50 dollars.  I just want to build credit in order to buy a house in the coming years. 

Thank you very much!

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Capital 1s score is the TU new accounts FAKO and cannot be used to equate your real FIco score. If the collection isnt updating every month and has aged it wont be impacting your score that much. If you pay a collection and dont get the PFD and it hasnt been updating then when it reports a paid off status your Fico will drop as it looks like a new collection in the eyes of Fico. Since its your only derog you are likely to see a score rise when it is removed but not always. Your AAoA as far as Fico is concerned is the age of your secured card, only OC accounts are computed into AAoA. A clean report is always preferable to one with derog(s), Here are a couple threads you can glean info on the PFD. Welcome to My Fico

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Q-amp-A-Examples-and-PFD-Success-Stories/td-p/2031275

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/td-p/4519

[RobertEG]

Credit report exclusion is an issue of whether others can see the reported collection, and thus become aware of the presence of an unpaid debt via a pull of your credit report,  and of removial of any credit scoring impact ot the collection.

It does not relate to satisfaction of the debt.

I would pay the debt afte it has become excluded, thus removing any issue of having an unpaid delinquent debt.

$50 is, in my opinion, well worth the price of no longer having an unpaid deliqnuent debt that could affect quests for future credit.

You could also offer a settlement for less......

[Anonymous]

Your chance for a PFD on a debt that old is pretty high. It would be money well spent ONLY if it was a deletion. If it was paid and updated as a $0 balance it would do more harm than good I think.

Remember, If you attempt a PFD offer and are turned down, try again.

[Anonymous]

Thank you all for your information and advice.  I am going to keep reading and learning, but it seems that the consensus is to send the letter, and pay off the debt. 

[Anonymous]

Only pay after they agree to a PFD. You can do it on the phone if you want. The letter is safer for the debtor (you) IMO but takes alot longer and sometimes gets NO responce. The phone works too and is a imeadiate attempt you can do while you are on the way to the post office to drop off the CMRRR letter.