@Crashem wrote:
Any new collection accounts will affect your credit score highly negatively. In about a year and to two years, the affect will be diminished. It doesn't seem to take into account how old the original account is. But you aren't asking the right questions in my opinion. Unless you are just paying attention to your score for fun, your real world credit goals are what matters.
Assuming you are over the time limit for them to collect the debt (decided state by state), your main concern right now is to find out when you had your last transaction on this debt (ie when you paid your last payment). Once you find that out and have proof, make sure to keep it so they can not reage your debt. From what you said, you should be fairly close to them falling off your credit report and any collection accounts as a result.
On the other hand, if you need to obtain credit before the 7 to 7.5 year falloff on these debts, then it might be worth talking to the collection agencies about paying some minimal amount in return for settling and removing the debt from the credit report. It is important to understand a couple of things. One, for this old debt, they probably paid max 10% for it. Second, you need to get your proof together and facts around the issue straight and basically have a come to Jesus talk with them. IE. you can't collect this debt as it is over the time limit, it is going to fall off my credit report on XXX date, you guys paid like 2-5% for it, but you do want to meet your old obligations so you are willing to pay xxx. Also, tell them if they refuse your offer, you will send them a certified letter telling them never to contact you again. Worse case, they say no and you havent lost anything.
I'm actually looking to app for a mortgage next year using FHA loan, however I can wait until everything fall off by 2014. I just don't see a point settling any charge offs or collections on my cr due to several reasons: high amounts (rather save that money for a big down payment even if FHA only requires 3.5%), all of accts will fall off by 2014, by then the effect on my score will be very minimal. I'm just afraid that a new ca may acquire the debts and reports as new on my cr, therefore, causing my score to decrease. My two collections are about 2-3 years, All the charge offs are 5-6 years old, I dnt think they have much impact on my score, what do you think?
