topic Re: Paying a collection or charge off in Rebuilding Your Credit

Paying a collection or charge off

Anonymous — Thu, 21 Jun 2018 15:40:34 GMT

I currently have a medical collection dating back to 11/2012 for $1214 and it's scheduled to fall off next year. In addition, I have a more recent charge off from 2016.

I was told the collection has already done its damage and it has less of an impact now - Is this true?

Paying the collection in full I have a better chance of having it removed completely. Which is better to do?

Re: Paying a collection or charge off

RobertEG — Thu, 21 Jun 2018 17:33:01 GMT

My first concern would be the possibility of additional score damage that might result from the recent unpaid charge-off.

A charge-off is often either referred to a debt collector or sold after that accounting measure is taken, which then permits the debt collector to report a collection. That adds another major derog to your credit report/scoring.

What is the DOFD on the charge-off, and does the creditor still own the debt?

As for a collection having less impact over time, that is true once the debt is paid.

Paying prevents continued reporting of a current status of unpaid (delinquent).

If a collection remains unpaid, each time the debt collector reports an update, it makes of record that the debt remains delinquent, and is treated, as with other delinquencies that increase in level of severity, such as from 90-late to 120-late, as being more, and not less, delinquent in time from the date of initial delinquency.

Paying in full offers more incentive for a possbile pay for deletion, but whether or not a debt collector will make an PFD agreement is totally up to them. The CRA reporting manual instructs them not to delete their collection based on payment of the debt, so if they routinely comply with their credit reporting agreement, they should not grant a PFD. Compliance varies widely.

Re: Paying a collection or charge off

Anonymous — Thu, 21 Jun 2018 18:04:12 GMT

Charge Off os may 2017 , first delinquency was Dec 2016 and it is still with the original creditor

The charge off account will not do a PFD at all, the collection agency says they will delete once it is paid.