Questions about collections and CO's

fwill5rn · ‎05-19-2013

I am ready to start paying off my collections and CO's on CR. I have two CO's. CO #1 is with Capital One and has been referred to an attorney. Judgment was filed and default judgment signed. I attempted to offer settlement but attorney refused. CO #1 2178.00. CO #2 is HSBC which has been bought by Cap One. This CO has been referred to Portfolio Recovery. I attempted to PFD and they denied. i offered 300.00 on CO #2 and they accepted it. Account would read "Settled in full" per acct rep. Full balance is 572.00. Do I pay 300.00 and CR settled in full or pay 572.00 for a paid in full?

As far as the collections, I have 10 on my report. All are medical. Some denied for nonpayment from insurance companies. I have several questions related to colllections. I read on the forums that collections that are 2 years or less impact your credit score the most. Is this accurate? When shouldn't I pay a collection? This question is not meant to get around paying the debt. Some of my collections are not actively reporting to the CRA. I think I read that if I pay them, the CA may start to report them again. Here is a list of my collections and DOFD:

Collct #1 659 Date reported 12/12 DOFD 07/2008

collct #2 904.00 Date reported 05/13 DOFD 09/10. This collection amount has been changed to 304.00. I called the doctor's office to see if they can recall from CA , they said they couldn't but adjusted the amount since the insurance didn't pay it.

collct #3 150.00 Date reported 07/11 DOFD 02/10

collct #4 2535.00 Date reported 04/2011 DOFD 02/07. This is one of the collections in question.

collct #5 199.00 Date reported 10/10 DOFD 06/09

collct #6 762.00 Date reported 0910 DOFD 02/09

collct #7 26.00 Date reported 11/09 DOFD 07/08

collct #8 39.00 Date reported 03/09 DOFD 07/09

collct #9 940.00 Date reported 03/09 DOFD 07/08

collct #10 66.00 Date reported 11/08 DOFD 05/08

I'm embarrased to have typed all of that but I want to pay these off so I can have a decent credit score. I'm not computer savvy and di\dn't know how to download the credit report otherwise I would have.

Any suggestions on where to start and what to do first?

Thanks for taking the time to read this long post. I have a mortgage, car and 4 installment loans that are current. How do installment TL's impact your FICO score?

Thx again!!!

guiness56 · ‎05-19-2013

@fwill5rn wrote:
I am ready to start paying off my collections and CO's on CR.   I have two CO's. CO #1 is with Capital One and has been referred to an attorney. Judgment was filed and default judgment signed. I attempted to offer settlement but attorney refused. CO #1 2178.00. CO #2 is HSBC which has been bought by Cap One. This CO has been referred to Portfolio Recovery. I attempted to PFD and they denied. i offered 300.00 on CO #2 and they accepted it. Account would read "Settled in full" per acct rep. Full balance is 572.00. Do I pay 300.00 and CR settled in full or pay 572.00 for a paid in full? Either one won't help your score with a collection account. It will still be scored the same. Paid in full is much better than settled. On CO#1 did you try to contact Cap 1 to ask for a settlement? You may have better luck with a GW for removal if paid in full.

As far as the collections, I have 10 on my report. All are medical. Some denied for nonpayment from insurance companies. I have several questions related to colllections. I read on the forums that collections that are 2 years or less impact your credit score the most. Is this accurate? When shouldn't I pay a collection? This question is not meant to get around paying the debt. Some of my collections are not actively reporting to the CRA. I think I read that if I pay them, the CA may start to report them again. Here is a list of my collections and DOFD:
A collection that is reported and updates monthly won't have an impact on your score. If one is dormant and has not been updated in a while, after paying your score could drop due to the date appearing newer. How much of an impact a collection has is determined by your credit profile. A collection is a major derogatory and the newer they are the more they hurt. Some will see an impact for near 7 years, others not so much. Either way, if looked at on a manual review, paid is always better than unpaid.

Collct #1 659 Date reported 12/12   DOFD 07/2008
collct #2 904.00 Date reported 05/13 DOFD 09/10. This collection amount has been changed to 304.00. I called the doctor's office to see if they can recall from CA , they said they couldn't but adjusted the amount since the insurance didn't pay it.

collct #3 150.00 Date reported 07/11 DOFD 02/10
collct #4 2535.00 Date reported 04/2011 DOFD 02/07. This is one of the collections in question.
collct #5 199.00 Date reported 10/10 DOFD 06/09
collct #6 762.00 Date reported 0910 DOFD 02/09
collct #7 26.00 Date reported 11/09 DOFD 07/08
collct #8 39.00 Date reported 03/09 DOFD 07/09
collct #9 940.00 Date reported 03/09   DOFD 07/08
collct #10 66.00 Date reported 11/08 DOFD 05/08

I'm embarrased to have typed all of that but I want to pay these off so I can have a decent credit score. I'm not computer savvy and di\dn't know how to download the credit report otherwise I would have. No need to be embarrased. Many have had more than this and you have to start somewhere.

Any suggestions on where to start and what to do first? I would definitely start with the judgment. The last thing you need is to have wages garnished. Start with the newest collections reported and see if they will do a PFD. Do different CAs hold these?

Thanks for taking the time to read this long post. I have a mortgage, car and 4 installment loans that are current.   How do installment TL's impact your FICO score?
Other than for credit mix, installment loans play a very small role in your score.
Thx again!!!

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fwill5rn · ‎05-19-2013

Thanks Guiness for you reply.

there are muliple CA's. Southern Recovery, Portfolio, CSD, Southern Credit, NCO. I would like to pay the smaller ones but I'm scared they may update and drop the score. I guess I should try to PFD those.

RobertEG · ‎05-19-2013

In my opinion, you most likely have a greater chance of spurring credit reporting by requesting a PFD than by paymentt of the debt.

A primary reason why debt collectors report their collections is as a collection tool. In this day and age where consumers have access to their credit reports and scores, debt collectors are aware that consumers are concerned about their reporting.

Once paid, a debt collector no longer has a business realted incentive to report, as colllection on the debt has terminated. They can still report the fact of their collection, but may not ake the time or effort if it does not serve their business need.

However, hearing from the consumer that credit reporting is important to them, they may see a benefit to reporting, thus spurring the consumer to pay in hope of getting the reporting deleted. Many consumers mistakenly believe that simply paying requires removal of a collection from their report.

The question of whether it is beneficial to ever not pay a debt can only be answered as no. It is against the terms of service of the site to recommend non-payment of legitimate debt. Aside from that issue, either non-reporting of delinquent debt to a CRA, or exclusion of a collection or charge-off after 7yrs/180 days, does not make the debt go away. In future apps for credit, if the creditor inquires about any unpaid, delinquent debt, the consumer is obligated to make a truthful disclosure.

It can be said that it is always best to pay old, delinquent debt.

fwill5rn · ‎05-19-2013

Thanks for the input RobertEG.