Paying off collection account.

[DaveyTech]

I have a collection account that was bought by a JDB.  It is well within the SOL for my state, and I dont want to get sued.  I would love to do a Pay For Delete, but I hear they are almost never granted anymore, especially with a relatively small amount of money such as mine.  The amount is small enough that I would like to pay it off in full and move on from it.  

My concern is that I am looking to buy a home in 6 months and I know that even a "Paid" listing on the collections account will cause an initial drop in my credit score, but it should be better than "Settled" or anything else.  Any ideas how long this would hurt my score?  In 6 months should it have recovered enough in any Lenders eyes? 

Thanks in advance.

[rckstrscott]

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@DaveyTech wrote:

I have a collection account that was bought by a JDB.  It is well within the SOL for my state, and I dont want to get sued.  I would love to do a Pay For Delete, but I hear they are almost never granted anymore, especially with a relatively small amount of money such as mine.  The amount is small enough that I would like to pay it off in full and move on from it.  

My concern is that I am looking to buy a home in 6 months and I know that even a "Paid" listing on the collections account will cause an initial drop in my credit score, but it should be better than "Settled" or anything else.  Any ideas how long this would hurt my score?  In 6 months should it have recovered enough in any Lenders eyes? 

Thanks in advance.

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Did you receive a notifiction?

Is it listed on your credit reports yet?

Your concern is founded, if it hits your report, it will show a date filed as within the last year, and that will stop a mortgage. Forget about the scores, any delinquent account in the last 12 months essentially stops underwriting. So you want to keep it off.

PFD is only nessecary if it is reporting... and they are most deinfitely still granted, for any amount.. What collection company is it with?

Do you have any other negatives?

-scott

[DaveyTech]

I have received a notification, just an "attempt to collect debt". I am not being sued yet. I have not sent a DV letter or anything because I know the debt is valid and I know I need to get it paid before applying for a lender because they wont lend with an open collections account.

It is with Midland Credit Management.  They are not showing on credit report yet.

It was previously with Equable Ascent Financial...and that is showing on report as Seriously Past Due..assigned to collections or attorney.  Last date on that is 2008.

I do have other negatives. Collection accounts that have been either paid in full or settled, 1 as recent as 1/2011, couple others back in 2008.

[rckstrscott]

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@DaveyTech wrote:

I have received a notification, just an "attempt to collect debt". I am not being sued yet. I have not sent a DV letter or anything because I know the debt is valid and I know I need to get it paid before applying for a lender because they wont lend with an open collections account.

It is with Midland Credit Management.  They are not showing on credit report yet.

It was previously with Equable Ascent Financial...and that is showing on report as Seriously Past Due..assigned to collections or attorney.  Last date on that is 2008.

I do have other negatives. Collection accounts that have been either paid in full or settled, 1 as recent as 1/2011, couple others back in 2008.

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I would negotiate with Midland that if you pay it, they won't report. This is highly plausible, since PFD only matters when its reporting, and this isn't...

USUALLY, if you pay after receiving a dunning, they don't report. But since a mortgage is on the line, Id get it in writing... if at all possible..

Rest assure this is one you can probably tackle. Midland sucks after the fact though, so try to keep it off your report.

[DaveyTech]

I am currently drafting a letter to them and will be sure to include that they dont report it as a condition.  Anything else you can think of that should be included to cover myself?

As for the Equable Ascent Financial...who was the original CA/JDB...is that still seen as unpaid by a lender?  Can I get them removed because they dont own the account?

Thanks.

[rckstrscott]

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@DaveyTech wrote:

I am currently drafting a letter to them and will be sure to include that they dont report it as a condition.  Anything else you can think of that should be included to cover myself?

As for the Equable Ascent Financial...who was the original CA/JDB...is that still seen as unpaid by a lender?  Can I get them removed because they dont own the account?

Thanks.

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You could send a DV to them, debt validation may have this account removed.. It is hard to say.. but at the bear minimum, it will show 0 balance owed because they dont own it, and as long as your scores are fine, the underwriter will  just blow right by that account because it doesn't have a balance.. (just did this 3 months ago) haha

If the DV doesn't work, you can always send them a letter askig to remove the listing since they no longer have the account.. they may oblige, since they have no money to gain from you, but money to lose if you keep sending them letters, which require staff to read them, file them, ect ect

-scott

[DaveyTech]

Good ideas...I will try them.

Thanks a lot.

[DaveyTech]

So I went ahead and tried to negotiate a full payoff for them not listing the account.  I havent received any response from them yet but I received a change to my credit report today, so I guess they didnt agree to it.

My report is now showing this account with "consumer disputing account" listed.  I did not dispute anything with them, nor did I accept responsibility for the balance, only offered to pay the full balance if they would not list me.

I have a debt validation letter going out this week.  Any other ideas on what to do next and how this listing will affect my credit?

[DaveyTech]

Anyone???

[llecs]

You're in the middle of a transition I suppose. If CA#1 passed it to CA#2, and CA#2 isn't reporting, then it would mean that either CA#1 just hasn't deleted yet or that CA#2 is  the collection arm of CA#1 which means CA#2 won't ever report. I'd google around to see the relationship between these two CAs. If unrelated, I'd send a DV to both and once they verify then I'd send a PFD to whomever is reporting. 

ETA...for clarity, did you offer to pay CA#2 in exchange for not reporting...and that resulted in a dispute comment on CA#1? If so, then it sounds like CA#2 is just collecting for CA#1 and won't report. If however you sent something to CA#1 then that can be the cause of the comment.