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I messed with the bull and got the horns...

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I messed with the bull and got the horns...

First, I just want to say that I have learned so much since my rebuilding started earlier in the year. I've made some great strides in trying to fix my credit but I have since hit a really big snag in my quest for a better credit score. Basically, I have a collection from a bad checking account from 2011 and a charge off from an old internet account from 2015 that are haunting me. After reading all the success stories on this forum about how people got PFD's on old accounts I decided to try my hand and write a letter to see if I could pay in full for all of this to just make it go away. Worst decision ever. My collection from 2011 (which is set to hit the 7 year mark in Aug 2018) has been updating monthly as late for the past few months (because it remains unpaid). I also sent a PFD letter to the internet company but never heard back so that's fine. Since that 2011 collection is now reporting monthly it has tanked my score so I know I need to do something about it asap. My question is, since there is little incentive for me to pay the amount in full (since they ignored my PFD request) should I just offer a settlement amount? I was willing to pinch pennies so I could paid the debt in full (it's a little over $500) but now that they pretty much screwed my score over by reporting it late every month I am not so eager to open my wallet and pay it. If that is the right move then how much is reasonable? I want to offer them a little over half and just have them mark the account as "settled and paid." Either way it won't affect my score, right?  I know in a manual review for a credit card it's supposed to look better when you pay any delinquent debts in full but I am not looking to apply for any more credit/credit cards for the next two years (or more) while I garden what I currently have. Same goes with the charge off, I would prefer to just offer half and mark it as "settled and paid." It's a little over $200 which I could manage to pay in full but if they will take less I would rather go that route. Another question I have is once the collection and the charge off are paid (whether patially or in full) it will still come off my reports according to the original DoFD, correct? I believe I have heard that paying them doesn't "reset" the time they come off your reports but just want to make sure. Thanks for any input and suggestions you may have!

Message 1 of 4
Super Contributor

Re: I messed with the bull and got the horns...

Regarding the collection:

You say that you it will be falling off your reports in < 2 years and that you also don't have any needs for credit during that time.  Can you help us understand why you want to pay it, in full or in part?


Regarding the charge off:

I can understand here why you might want a PFD solution, since it will not fall off until 2022.  Hopefully someone with more experience with PFD can chime in.  Simply sending one letter, however, and then throwing in the towel may be premature -- negotiating a PFD might require phone calls and persistance at finding the right rep to agree to it.  Again, someone else here (or in the rebuilding forum) might know more.  I suspect that you might have more leverage when the statute of limitations has passed, though that might take years more of waiting., which of course you'd want to avoid.  Knowing the SOL is always useful for any debts one has abandoned, regardless, IMO.

Message 2 of 4
New Contributor

Re: I messed with the bull and got the horns...

The collection: After I sent the PFD letter and they started reporting it "late" every month my scores took a nose dive (especially TU which used to be my highest and still is but not by much now). By updating every month won't it continue to affect my score negatively? It's also the only collection I have that shows on all three bureaus. Ouch. While I will not be looking to gain new credit for the next 2 years or so I do want to be able to ask for some CLIs on my current cards some time down the road. Since my score dropped so drastically after this started reporting late it makes asking for any CLI that much more difficult.

Charge Off: This one makes me nervous because, as you already stated, it's pretty new so it's still within SOL. That is never good so I kind of want to sweep this one under the rug as quickly as possible. Also, since it is a charge off I can just pay the company instead of dealing with some collection agency. I don't feel comfortable calling so I might just have to bite the bullet on this one and just cough up the money to avoid further action.
Message 3 of 4
Super Contributor

Re: I messed with the bull and got the horns...

Hey Imateo85!  The sentence about not needing credit for the next few years led me in the wrong direction.  Actually you do intend to be applyling for more credit (which is what a CLI is -- it's just not a new credit card)  So yes, if you want to apply for more credit and need better scores, then I guess you'll need to do what you can to improve your scores.


Talk to people with greater expetise in paying off collections as to what score increase you can expect in less than a year from paying off a collection that still stays on your reports the full 7 year period.  It may be a decent amount, but it may not be much.


You should also spend some time weighing the reasons why you want the CLIs and if the cost of the payoff is worth it.  If you are thinking that bigger CLs are needed for a good score, then you may be going down the wrong path.  A person can have a score in the 830s with cards that have $500 limits. 


On the other hand maybe the amount of the collection is very tiny so maybe it is no problem.


Best of luck regardless...



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