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Should I pay 6yr old collection?

New Member

Should I pay 6yr old collection?

First off, I would like to thank the community for all the advise I have taken in while lurking in the background. My rebuild started started August of this year my Fico scores from here were all around 550. With the help here I learned about PFD. I had about 6 medical collections with Rash Curtis for the same event I believe. The way the hospital bills, all the consultants billed separately and the radiology tests were billed separately. I had varying collections anywhere from $50 to $1300. They agreed to do PFD. I also had utility bill for $600, they settled for $400 and also agreed for PFD. Then I got lucky and a collection for $9500 from an apartment complex aged off through fair collections and outsourcing, which I heard NEVER do a PFD. I have 2 collections remaining from Fair Collections and Outsourcing totaling $750. They are still reporting every month from what I can tell through CK which I still use to see accounts not scores. One would fall off in May 2018 and the other may 2019. I would like to pay them off but I am still not sure if that would bring my score down. I know it won’t help my score much if I pay them off since they won’t do PFD. But I guess my question is.... if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report. I think have come so far in such a short time I don’t want to mess it up.

My current Fico scores are
Equifax 684
Transunion 691
Experian 662

Went from no credit cards to:

Capital One $300 started with this card with no luv yet open for 3 months

Merrick double your limit $700 5 months left to double limit.

Discover it $1600
Citi double cash $2000
Wells Fargo $2000
Amex blue cash everyday $500
Amex PRG charge card
Message 1 of 19
18 REPLIES
Established Contributor

Re: Should I pay 6yr old collection?

.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.

 

Paying them off should help your score, since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise. If it was me, I'd leave the 2018 alone but pay the 2019 one, since the 2018 will be falling off fairly soon. (You can also for early exclusion a few months before the 2018 is due to fall off). Congratulations on all your rebuilding work so far! 

Gardening until June 2018

Starting FICOs: EX 623, EQ 589, TU 600 (06/10/17)
Current FICOs: EX 696, EQ 672, TU 678 (12/15/17)
1st Goal FICOs: EX 750, EQ 750, TU 750 (??/??/??)
Message 2 of 19
Established Contributor

Re: Should I pay 6yr old collection?

If you can pay them off easily, I say pay them off.

 

I would try to negotiate the amounts lower and negotiate them removing negative reporting.

 

If it is not easy to pay them off, dont pay anything.  They will fall off.

 

If you start a payment plan or send them 1 cent, everything resets timeline wise.

 

It will be 7 more years before those accounts fall off.

 

Paying them off may actually hurt your score a little, but if you have the money, its the right thing to do.

 

Also, having open collection accounts can be an auto-decline from credit unions and banks.

 

There is more the a credit file than the score.

 

 

 

credit rebuild started 01/01/14
$100k credit card goal achieved 10/01/17
now in the garden with $127k in credit cards
--------------------------------------------------------------------------------------------------
  $ 30,000          $ 25,500          $ 23,750              $ 9,000            $ 3,300            $ 1,800     

 
  $ 17,000          $ 10,000              $ 4,000            $ 2,300     
Message 3 of 19
Established Contributor

Re: Should I pay 6yr old collection?

Have you informed yourself about the HIPPA laws?
HIPPA deals with medical.
Read that 1st.
Message 4 of 19
Community Leader
Super Contributor

Re: Should I pay 6yr old collection?


Shooting-For-800 wrote:

 

 

If you start a payment plan or send them 1 cent, everything resets timeline wise.

 

It will be 7 more years before those accounts fall off.

 


This is simply not true. A payment plan or a partial payment does not reset ANYTHING. Entering into a payment plan or making partial payment and then not following through "can" establish a new SOL (for which you can be sued) under certain conditions, but that has nothing at all to do with reporting.

Most Recent FICO 8 Scores EX601/TU580/EQ589 12/08/2017 Starting scores 553/485/543 08/25//2017
~~~Credit lines~~~~
SDFCU VISA Secured $250
Discover Secured $200
Message 5 of 19
Highlighted
New Contributor

Re: Should I pay 6yr old collection?

OP wrote:

.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.

 

Adkins wrote: 

Paying them off should help your score since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise. 

 

I am by no means an expert, but I don't think that at this point monthly collection updates are damaging to OP's score. The longer the collection has been on the report the less impact it has on the score. The last collection I had was 2 years old and the CA was updating as unpaid twice a month. When it was removed I gained about 30 points with Equifax and Experian, but only about 11 points with Transunion. My score did not go down when they re-updated mid-month. It seems like you lose all of your points up front when the collection hits. It might cause a "ceiling" where you can't attain past a certain credit score while it's still listed on your CR, but I don't think it causes a monthly score drop after the initial damage.

 

** Someone please correct me if I'm wrong! This is anecdotal evidence based on my own experience! **

Message 6 of 19
New Member

Re: Should I pay 6yr old collection?

That’s what I thought. Maybe I’m at a ceiling and I won’t be able to go much higher with the collections on. I’m going to call to pay them off today. My only concern is that I got an early deletion from the same collection agency. Can they re report the old debt that has been removed from the credit agencies.
Message 7 of 19
Regular Contributor

Re: Should I pay 6yr old collection?


EveWasFramed wrote:

OP wrote:

.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.

 

Adkins wrote: 

Paying them off should help your score since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise. 

 

I am by no means an expert, but I don't think that at this point monthly collection updates are damaging to OP's score. The longer the collection has been on the report the less impact it has on the score. The last collection I had was 2 years old and the CA was updating as unpaid twice a month. When it was removed I gained about 30 points with Equifax and Experian, but only about 11 points with Transunion. My score did not go down when they re-updated mid-month. It seems like you lose all of your points up front when the collection hits. It might cause a "ceiling" where you can't attain past a certain credit score while it's still listed on your CR, but I don't think it causes a monthly score drop after the initial damage.

 

** Someone please correct me if I'm wrong! This is anecdotal evidence based on my own experience! **


Adkins is correct.  You aren't wrong, but you aren't entirely right, its really more a matter of semantics.  Yes, the damage is really done when the collection is initially reported, but if it is updating every month, you are always at month 0 and never distancing yourself from a derogatory event.  Once a collection is paid and that payment is reported, you start getting farther and farther from a derogatory event and your score can start to rebound.  Paying a collection off will not hurt your score, but it won't necessarily help it either depending on your profile.

FICO8 Scores as of 8/8/17: EQ-643 TU-644 EX-629
Current FICO8 Scores as of 12/7/17: EQ-675 TU-658 EX-652
Current Mortgage Scores: EQ-686 TU-677 EX-641
Goal: all FICO8s above 700
Message 8 of 19
Community Leader
Super Contributor

Re: Should I pay 6yr old collection?


EveWasFramed wrote:

OP wrote:

.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.

 

Adkins wrote: 

Paying them off should help your score since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise. 

 

I am by no means an expert, but I don't think that at this point monthly collection updates are damaging to OP's score. The longer the collection has been on the report the less impact it has on the score. The last collection I had was 2 years old and the CA was updating as unpaid twice a month. When it was removed I gained about 30 points with Equifax and Experian, but only about 11 points with Transunion. My score did not go down when they re-updated mid-month. It seems like you lose all of your points up front when the collection hits. It might cause a "ceiling" where you can't attain past a certain credit score while it's still listed on your CR, but I don't think it causes a monthly score drop after the initial damage.

 

** Someone please correct me if I'm wrong! This is anecdotal evidence based on my own experience! **


The thing is yours was only two years old. Very little score difference between a two year old collection and a brand new one.

Most Recent FICO 8 Scores EX601/TU580/EQ589 12/08/2017 Starting scores 553/485/543 08/25//2017
~~~Credit lines~~~~
SDFCU VISA Secured $250
Discover Secured $200
Message 9 of 19
Contributor

Re: Should I pay 6yr old collection?

I was under the impression that the date a collection account is added doesn't matter, that it is the DOFD listed on the collections account.  So a brand new collections for a 6 year old debt is scored as being 6 years old.

Message 10 of 19