topic Re: Does Paying for Collections Increase Score? in Rebuilding Your Credit

Does Paying for Collections Increase Score?

rebuildingincb — Sun, 19 May 2013 09:42:59 GMT

I currently have 6 accounts in collections:

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Original lender [?]Account number [?]Account holder [?]

217YC01272

$444

Dec, 2012

Sprint

XXXXXXXX

Individual

Collection on debt to: Gmac

The collection agency "083YC00034" was hired to collect a debt of $119 originally owed to "Gmac" on account number "XXXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Original lender [?]Account number [?]Account holder [?]

083YC00034

$119

Oct, 2012

Gmac

XXXXXXXX

Individual

Collection on debt to: Sprint

The collection agency "701YC00488" was hired to collect a debt of $497 originally owed to "Sprint" on account number "XXXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Original lender [?]Account number [?]Account holder [?]

701YC00488

$497

Jul, 2012

Sprint

XXXXXXXX

Individual

Collection on debt to: Progress Energy

The collection agency "848YA00097" was hired to collect a debt of $182 originally owed to "Progress Energy" on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Original lender [?]Account number [?]Account holder [?]

848YA00097

$182

May, 2008

Progress Energy

XXXXXXX

Individual

Collection on debt to:

The collection agency "083YC00000" was hired to collect a debt of $281 on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Account number [?]Account holder [?]Account descriptions [?]

083YC00000

$281

Aug, 2007

XXXXXXX

Individual

Medical

Collection on debt to: New River Area

The collection agency "083YC00034" was hired to collect a debt of $120 originally owed to "New River Area" on account number "XXXXXXX".

Collection agency [?]Original balance [?]Current balance [?]Date assigned [?]Original lender [?]Account number [?]Account holder [?]

083YC00034

$120

Mar, 2009

New River Area

XXXXXXX

Individual

One of them I paid over a year ago (old electric bill and I needed service in my name, paid the OC). The $120 to New River should be coming off, CA could not verify. The 2 for Sprint I am going to make them verify because they appear to be duplicates? The other 2 I owe, asked for PFD on the medical and the GMAC, no go, so going to PIF over next couple of months.

My question would be, does it help my score to pay them even though they aren't getting deleted and will be on my CR for 7 years? I know I have to pay them, was just wondering if it will help my score at all, am trying to buy a car in the next 6mos.....

Re: Does Paying for Collections Increase Score?

Burned2manybridgesB4 — Sun, 19 May 2013 10:19:02 GMT

There's a few spins here:

If they're reporting as a "factoring company," and the possibility of being treated as a line of open credit by FICO, due to the CA's coding.

Paid debt is always better, as it won't update down the road, when your score does increase, which will knock you back down again.

The medical debt: see if you can't get the OC (doc/hospital) to pull it back, if you can pay them directly.

I see the assigned dates, but what were the original DOFD's from the OCs?

Re: Does Paying for Collections Increase Score?

rebuildingincb — Sun, 19 May 2013 10:43:37 GMT

@Burned2manybridgesB4 wrote:
There's a few spins here:

If they're reporting as a "factoring company," and the possibility of being treated as a line of open credit by FICO, due to the CA's coding.
Paid debt is always better, as it won't update down the road, when your score does increase, which will knock you back down again.
The medical debt: see if you can't get the OC (doc/hospital) to pull it back, if you can pay them directly.

I see the assigned dates, but what were the original DOFD's from the OCs?

My report I purchased (neither from here nor the 3 I just bought from EQ site) doesn't show this DOFD. The Sprint ones were probably 2009. If I go to OC on the medical, how do I ask them to remove? I could go to that hospital tomorrow and pay the $281 I owe. (looking for specific language/questions to ask if I do it).

Thanks for your reply!

Re: Does Paying for Collections Increase Score?

Burned2manybridgesB4 — Sun, 19 May 2013 10:46:35 GMT

Here's a link to pull from EQ: It'll show the DOFD (for original accounts/maybe collections if they're reporting it)

https://aa.econsumer.equifax.com/aad/landing.ehtml

As far as the medical debt, you need to contact the billing department, and explain the situation, hoping they'll make the time to search for it, and you then ask them to pull it back, for payment.

Re: Does Paying for Collections Increase Score?

Burned2manybridgesB4 — Sun, 19 May 2013 10:48:54 GMT

I'm not exacly sure of the legal part towards CA's showing the OC's DOFD, but I'm fairly confident that they have a specific timeframe to report this information (30-60 days?) from the point they insert into your CR.

Others will jump in sooner or later to add.

Re: Does Paying for Collections Increase Score?

rebuildingincb — Sun, 19 May 2013 12:07:20 GMT

Thanks for the help. DoFD is different on both Sprint accts, which is weird since I don't remember having more than one account with them. Wondering if I should try to contact Sprint first? One of them is 6/07 DoFD the other is 5/10.

I still go to the same Dr that that reports that collection, so will contact them Monday.

Thanks again for the help!

Re: Does Paying for Collections Increase Score?

Anonymous — Mon, 20 May 2013 12:32:21 GMT

They all seem to be small ammounts. I am currently rebuilding my credit so I can buy a house. Before I started over a year ago my first question I asked is Can I afford to fix my credit ? Not meaning can I pay someone else to fix it, but if I couldn't pay my current bills then what was the point of trying to fix the old ones. I have been saving for a while so this was not an issue. All your accounts are very small for those I would try to pay in full if possible but lets face it the damage is already done. Even if you wanted to settle it would have little impact on your credit. Now im guessing you don't have much of a credit history because other than GMAC none are actual loans/credit cards. IF you want to see your score start going up open up a secured credit card or possibly unsecure if you can. Used the card, make your payments on time and it will slowly go up over time. Also back to my first few statements if you can't afford your bills now, there no point trying to fix your credit. Nothing will kill it faster hen a few 30 day late payments after you've been rebuilding for 6 months.

Re: Does Paying for Collections Increase Score?

rebuildingincb — Mon, 20 May 2013 12:39:13 GMT

@Anonymous wrote:
They all seem to be small ammounts. I am currently rebuilding my credit so I can buy a house. Before I started over a year ago my first question I asked is Can I afford to fix my credit ? Not meaning can I pay someone else to fix it, but if I couldn't pay my current bills then what was the point of trying to fix the old ones. I have been saving for a while so this was not an issue. All your accounts are very small for those I would try to pay in full if possible but lets face it the damage is already done. Even if you wanted to settle it would have little impact on your credit. Now im guessing you don't have much of a credit history because other than GMAC none are actual loans/credit cards. IF you want to see your score start going up open up a secured credit card or possibly unsecure if you can. Used the card, make your payments on time and it will slowly go up over time. Also back to my first few statements if you can't afford your bills now, there no point trying to fix your credit. Nothing will kill it faster hen a few 30 day late payments after you've been rebuilding for 6 months.

Thanks for the reply.

I can afford my bills now, I make between $40-$50k and is rising yearly. (I know this isn't a bunch of money, but I live within my means).

I opened my first credit card in years last March. Credit One, $300. They just raised me to $400.

Next came FP. $300 7/12 (coming up on one year)

Helzberg (Cap1) was next in 12/12 $2100

Finally Cap1 secured I got last month. $200 (just added $100 to it last week, this card won't show until late next month on my credit from what I have read)

The only balance I am carrying right now is on Helzberg, $1400 (was $1800 initially). I also just got accounts with my local CU and will most likely open a secured card with them in th coming weeks.

Re: Does Paying for Collections Increase Score?

Burned2manybridgesB4 — Mon, 20 May 2013 13:49:06 GMT

About the sprint listings:

Are you seeing one titled "sprint comm,' or something similar, showing a zero balance, and another from a collection agency, with the "sprint" in descriptions/showing a balance? Are the account numbers similar/same/way different?

Re: Does Paying for Collections Increase Score?

rebuildingincb — Mon, 20 May 2013 13:54:29 GMT

@Burned2manybridgesB4 wrote:
About the sprint listings:

Are you seeing one titled "sprint comm,' or something similar, showing a zero balance, and another from a collection agency, with the "sprint" in descriptions/showing a balance? Are the account numbers similar/same/way different?

Both just say Sprint, they have different DoFD dates and different account numbers. Both show balance, one $444 and another for $497

Re: Does Paying for Collections Increase Score?

Burned2manybridgesB4 — Mon, 20 May 2013 14:02:04 GMT

Since you're using the coded version of your CR, I'm willing to make a guestimate, and bet my life on it that you have two different collection agencies trying to collect, and the larger amount is the most recent. DV.

Re: Does Paying for Collections Increase Score?

Burned2manybridgesB4 — Mon, 20 May 2013 14:02:59 GMT

Two CAs can be on your report for one debt, but one has to be at zero balance, and only the current collector can show a balance.

Re: Does Paying for Collections Increase Score?

Anonymous — Mon, 20 May 2013 14:54:51 GMT

@Burned2manybridgesB4 wrote:
Two CAs can be on your report for one debt, but one has to be at zero balance, and only the current collector can show a balance.

If a debt is sent back to the OC, the CA has to delete their TL. If a JDB transfers or sales their debt they have to delete their TL.

Only one CA can actively collect. Just being on your CR is considered collection activity.

Re: Does Paying for Collections Increase Score?

Burned2manybridgesB4 — Mon, 20 May 2013 14:57:24 GMT

WHOOOPS...my bad. I'm done for the day.

Re: Does Paying for Collections Increase Score?

rebuildingincb — Mon, 20 May 2013 15:05:35 GMT

@Anonymous wrote:
@Burned2manybridgesB4 wrote:
Two CAs can be on your report for one debt, but one has to be at zero balance, and only the current collector can show a balance.

If a debt is sent back to the OC, the CA has to delete their TL. If a JDB transfers or sales their debt they have to delete their TL.
Only one CA can actively collect. Just being on your CR is considered collection activity.

I called Convergent this morning, they are sending me validation along with an offer to settle. If it is valid and they offer to settle for 50% will it look bad if I take that? I asked for PFD they said they don't do that.

Re: Does Paying for Collections Increase Score?

Anonymous — Mon, 20 May 2013 15:09:17 GMT

When it comes to a CA, FICO scores them the same, paid, unpaid, settled. However, on a manual review the settled will look bad to a lender/creditor. Unless you can get the CA to have your CR read paid in full.

If they don't do PFD maybe they will remove with a GW letter.