to pay or not to pay.

[Anonymous]

Hello,

I am new to the site and have a few questions. Just a quick background. I am 32 yrs old. I purchased a home when i was 19yrs old and lost it in 2007. I was laid off from a good job and ran up a bunch of debt trying to keep my head above water. being young and dumb i just stopped paying my bills and let the bank take the house back. fast forward to present day and those debts are nearly behind me. Last year i had 11 accounts in collects on my record. now all but 2 have dropped off my record. I currently have an experian score of 637 and a trans union score of 649. My score was 517 less then a year ago and as bad records fall off my score gradually rises monthly. I have a total of 4 new credit cards that i keep below %25 utilization with limits as follows, $300,500 from capital one, $400 from creditone and $1700 from first national bank of omaha. oldest credit card being the $500 limit from capital one with 7 month perfect payment history.

Now the questions:

I have one collection account with a $0 balance that started as a $160 utility bill and i paid off for an agreed amount of $91.  It is scheduled to fall off my record in 06/15. I also have an open collection from verizon wireless with a balance of $548. It is scheduled to fall off my record sometime this month (12/14). Should i call and try to negoiate a pay for delete? or pay a discounted amount? or should i just let it go?

[coterotie]

Let it fall off.  Then settle for 10% of the amount.

Try to GW the other one.

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@Anonymous wrote:

Hello,

I am new to the site and have a few questions. Just a quick background. I am 32 yrs old. I purchased a home when i was 19yrs old and lost it in 2007. I was laid off from a good job and ran up a bunch of debt trying to keep my head above water. being young and dumb i just stopped paying my bills and let the bank take the house back. fast forward to present day and those debts are nearly behind me. Last year i had 11 accounts in collects on my record. now all but 2 have dropped off my record. I currently have an experian score of 637 and a trans union score of 649. My score was 517 less then a year ago and as bad records fall off my score gradually rises monthly. I have a total of 4 new credit cards that i keep below %25 utilization with limits as follows, $300,500 from capital one, $400 from creditone and $1700 from first national bank of omaha. oldest credit card being the $500 limit from capital one with 7 month perfect payment history.

Now the questions:

I have one collection account with a $0 balance that started as a $160 utility bill and i paid off for an agreed amount of $91.  It is scheduled to fall off my record in 06/15. I also have an open collection from verizon wireless with a balance of $548. It is scheduled to fall off my record sometime this month (12/14). Should i call and try to negoiate a pay for delete? or pay a discounted amount? or should i just let it go?

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[Anonymous]

If i let it fall off couldn't i just never pay it because it is off my record and past the stature of limitations? what is GW?

[RobertEG]

Credit report exclusion prevents the CRA from including the collection in normal credit reports they issue after the exclusion date.

It does not satisfy the debt nor actually delete the collection from your credit file.

A potential creditor may not be able to become aware of the unpaid debt by a simple pull of your credit report, and not seeing the unpaid collection, but could still become aware of the unpaid debt, such as by simply asking for disclosure of any unpaid, delinquent debt.

[Anonymous]

so if i wanted to get a home loan the bank would pull my credit and see the unpaid debt? I have only paid 1 of the 11 collection account that were on my record. The others just fell off my report. I was under the assumption that the banks wouldn't see them after the 7yr plus 180 day mark. does this mean that in order to get a home loan i need to go back and settle all the debts that have already fallen off my record in order to show a $0 balance?

[Anonymous]

As Robert has pointed out many times, there is a provision in the law that allows a lender to 'see' your entire file, included items that have 'aged off', when the loan amount you are requesting is over 150K. Whether lenders actually routinely do this is up for debate, since the vast majority of loans these days in many markets is above that limit. I don't believe there has been anyone in the forums reporting that this has actually occurred with them, but the possibility does exist.

[RobertEG]

Credit report exclusion certainly makes it more difficult for others to become aware of the delinquent debt, but it does not prevent it.

First, credit report exclusion is not absolute.  FCRA 605(b) exempts all of the normal credit report exxclusion provisions if a party is making an inquiry related to a consumer initiated request for credit in the amount of $150K or more.  They can request and receive a full-file credit report that includes any derogs that are normally excluded.

Such requests are not common, and the inquiree must state that the inquiry qualifies for the exemption.  The simple fact that you are applying for credit in the amount of $150K or more will not automatically result in the issue of a credit report showing the old collection or charge off.

More common is the simple practice by many high-principal lendors to require, as part of their loan application, the disclosure of any unpaid, delinquent debt.

It is discretionary to make such inquiry, but if they do, you would be obligated to disclose, notwithstanding the fact that a collection has become exccluded from your normal credit report.

You takes ur chances.......

[MarineVietVet]

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@Anonymous wrote:

so if i wanted to get a home loan the bank would pull my credit and see the unpaid debt? I have only paid 1 of the 11 collection account that were on my record. The others just fell off my report. I was under the assumption that the banks wouldn't see them after the 7yr plus 180 day mark. does this mean that in order to get a home loan i need to go back and settle all the debts that have already fallen off my record in order to show a $0 balance?

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You are correct but there are three exceptions to the CRTP (Credit Reporting Time Period). According to FCRA(b):

 Exempted cases.

The provisions of paragraphs (1) through (5) of subsection (a) of this section are not applicable in the case of any consumer credit report to be used in connection with

(1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.

I have never known anyone who reported a lender using those exemptions to dig further into a credit profile beyond the CRTP. Of course it could happen but it's very unlikely.

ETA: I was late to this party! Much of what I wrote has already been covered but I will say once again that the chances of a lender using this route is slim to none.

The chance is always there but IMO it's nothing to worry about. Plus in my 40+ years of using credit I've never been asked if I had any unpaid debt that wasn't reporting.

[RobertEG]

I see about one post per year that relates to a creditor making inquiry for a full-file credit report.

I agree that it is not common. 

[Anonymous]

well it sounds like its something to keep in the back of my mind but hope its not going to be a problem.