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Paying off collections

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CyberVike
New Member

Paying off collections

I'm trying to help my wife get her score up so we can apply for a mortgage.  She has several Medical related collections on her credit report we just pulled.  Most of them are in the  $200 range but one was as low as $25.  We can pay these off in full without issue but I was wondering what is the best way to handle this and not have it negativley affect her score?  THey are somewhat recent (2009)

 

Is it possible to ask them to remove the collection from her report?  Should we call or mail them? Is there anything we can request that might help her score improve by paying these off in full?

 

Thanks in advance

 

 

Message 1 of 6
5 REPLIES 5
llecs
Moderator Emeritus

Re: Paying off collections

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

 

There's a one of two methods you can take on any medical collections. One is to pay the doc's office and start the HIPAA process. These forums don't support the info needed for these so you'd have to google for more info. PErsonally I would take a different path. I would mail each a DV letter (even if I was 100% sure it was mine...a DV establishes the ownership of the debt and the balance owed). If they verified and I agreed, then I'd mail each a PFD letter. If they agree in writing, then I'd pay it and they'll delete.

 

Message 2 of 6
LIGHTNIN
Senior Contributor

Re: Paying off collections

Welcome to the forums,

 

Yes it's possible to remove the collections, as long as the CA agrees to.

IME, I had no problem with the CA agreeing to delete, but that's just me.

 

Some things about collections......an unpaid CA is scored the same as a Paid collection.FICO sees a collection as a collection.

Paid is the same as unpaid, $5 debt the same as $5K debt. Recent collections can hurt a FICO by 80-100pts in the beginning,then they tend to hurt less and less as time going on. 

I would suggest working on the most recent CA first, because they are the ones hurting your CS the most.

 

The OC and a CA can both report on the same debt.When a OC reports a past due debt, it dings your CS(credit score).

Then if a CA reports on the same debt, it ding your CS even more.

 

Debts are either assigned to a CA or sold.If assigned the OC still owns the debt.

If sold, the OC changes the balance to $0 and the CA is the one you have to deal with.

 

In your case, I would suggest contacting the OC, see if they still own the debt and are willing to accept payment.Also to agree, to call back the debt from the CA.Get in writing first before paying.

 

If sold to the CA, send a DV letter and if they verify send a PFD letter (pay for delete).It's a win win situation. You pay in turn for the CA to delete.Here's an example of a PFD Letter . I would suggest to write a PFD letter refers to your situations, also IMO the wording that says" delete within 10days" I feel like it's too demanding, but that's just me. I would read the letter back to myself, as if you were the one sitting at the CA.Ask yourself, if you would agree to this.

 

Sorry for the long post, I'll try to wrap it up. IME, I didn't use a DV letter just a PFD and it worked for me.

For more detailed info read  What Steps Do I Take?Do I DV?PFD?  If you havent already Smiley Wink

 

ETA...Thanks llecs...Wow, I really type slow. LOL Having numb fingers are not helping. Sorry for the duplicate info, if any.

FICO's May 2015 EQ764 ~~Live below your means and always keep an emergency fund -Love Everybody ~ Big Kenny ~ Big and Rich ~~~~~Credit Scoring 101 - Common Abbreviations - Freq Req Threads - Free Credit Reports - What Steps Do I Take?DV? PFD?
Message 3 of 6
CyberVike
New Member

Re: Paying off collections

Thanks for all the info.  Much appreciated. 

Message 4 of 6
CyberVike
New Member

Re: Paying off collections

If the OC still owns the debt and is able to pull it out of collections and I pay them directly would that force the CA to stop posting to the credit bureaus?

Message 5 of 6
llecs
Moderator Emeritus

Re: Paying off collections


@CyberVike wrote:

If the OC still owns the debt and is able to pull it out of collections and I pay them directly would that force the CA to stop posting to the credit bureaus?



It depends unfortunately. It depends on the agreement the OC has with the CA. There are some stories on here where the OC pulled the debt back from the CA and accepted a payment and the CA stopped reporting all together (assuming on the persistence of the OC to have the CA delete). Yet other times the OC accepted payment and would ask the CA to delete, and the CA updates to $0 instead. Nonetheless, get everything in writing.

Message 6 of 6
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