paying off a old collection account

[RobertEG]

The unpaid debt does not fall off upon exclusion of the collection from your credit report.

It remains until satisfied.  Credit report exclusion shields knowledge of the prior collection on the unpaid debt from others reviewing your credit report, but future creditors, if aware of the debt, may still consider it in their lending determinations.

No, paying wont directly improve your credit score, but the issue with a propspective lendor may simply be the presence of unpaid, delinquent debt, regarrdles of your credit score.

Unless you are willing to rely solely upon credit report exclusion as shielding future creditors from knowledge of the unpaid debt, you may be required to satisfy the debt.

Having some time before loan app, you can attempt either/or a PFD to also imprpve your score, or a settlement to save you some $$.

Bottom line may simply be a requiremet to satisfy the debt, with credit score improvement being an additional consideration.

[amkari]

I'm in the process of purchasing a house in conjunction with my parents.  I had 3 unpaid collections from 2008 that I was basically sitting on until they fell off... given no ability to pay them off.  Part of the requirements for adding me to the mortgage to offset my mother's income (due to a pending business judgement she cannot be included on the mortgage) was for me to clear those collections.  Basically my score was fine, it was the unpaid balance that was the hang up.

My parents provided the money to clear those off, one was a small colelction agency who offered up front to delete as soon as the payment was processed.  The others are Asset Acceptance and Midland.  All the balances were mine, but I did not acknowledge any ownership or responsiblity to the CA.  I have a good feeling about being able to get Midland to delete on a GW in 30 days, but probably not Asset Acceptance.

I would imagine the only issue on yours is the unpaid status as well... from what I understand, mortgage companies don't like unpaid collections.  :-)

[mzbailey]

thanks so much everyone your input has been very helpful. i researched online and found a sample payment for deletion letter and mailed it out to the CA yesterday so i have my fingers crossed to see what their response will be.