02-21-2012 06:05 PM
I received an offer from a collection agency to pay off a debt "in full" for 50% of the amount owed. I sent them a PFD letter stating I would pay them the 50% for removal of the account from my credit report and that I laid no claim to the debt, but wanted the issue resolved. They called me back and gave me the whole "we don't have to honor the 50% payment option but as a FAVOR to you we'll still accept 50%" but that they couldn't do a PFD because it was against the FCRA. What should I do now?
02-21-2012 07:09 PM
What to do next depends upon what you are seeking.
They have offered a settlement for less than the full debt. If you accept, you will eliminate any chance of future legal action (assuming the debt is still within SOL), and improve your CR upon manual review by showing satisfaction of the debt. You save money by not paying the entire debt. That may be important to a future creditor. And, of course, you save money by not paying the entire debt, and "do the right thing."
On the negative side, lack of CR deletion will continue to include the collection in your scoring. Additionally, settling for less will permit them to post an additional special comment in your credit report notifying others that you did not fully satisfy the prior debt. That alone is a negative in a manual review.
What you can do? You could, if so inclined, argue their statement that deletion is "against the FCRA," since it is not. However, a PFD offer is a type of GW request, and I doubt that arguing the correctness of their reason will foster much good-will. It is contrary to their credit reporting agreement with the CRA to delete on the basis of payment, but whatever their reason is, it is their decision.
Personally, I would make them an offer to pay at the 50% agreed level, but with the additional condition that they not report a special comment of "paid for less."
02-21-2012 07:29 PM
The total for the debt is around $400. Not to sound pompus, but I can pay in full with cash if I wanted. I'm only concerned about the impact to my CR at this time since I've been wroking for years to clean it up and this is the last fly in the ointment. If I did decide to pay in full, should I contact the original creditor as opposed to giving the collection agency any money?
02-21-2012 07:47 PM
If you PIF, it would make no difference. Your CR would arrive at the same point.
OC reporting current status of Paid, current debt balance of $0.
Debt collector reporting collection account closed, $0 debt under collection.
Who you pay will affect the order to that reporting, but one has to notify the other after the debt is satisfied, and ultimately the final reporting will be the same.
02-21-2012 07:52 PM
How old is this debt? Or do you know the date it will drop off your CR?
Do you know the DoFD (date pf forst default) from the OC account reporting?
DoFD can be found on a EQ CR. Date of removal are on EX and TU CR's.
02-22-2012 12:14 AM
With this debt only being 4yrs old,if by chance you can get it deleted,you may receive a score increase.
IME with CA's, some do say they will not delete upon payment, but will delete when asked after payment.
Good Luck to you
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.