Pay off Collection?

[Anonymous]

I have a collection in serious dispute. At this point it may be easier to just pay it off, however I have been told that the payoff will not eliminate the collection from my report or raise my score for 7 years. Is this true? If so than I may as well continue the long fight....But I am looking to buy my first house soon and just want the best credit score I can get. Any help would be great.

[Anonymous]

Dispute it, but if you lose the dispute, don't bother paying it. FICO doesn't care whether you pay a collection or not, and it will still be on your report, dinging your FICO, for seven long years.

So I say don't do anything you don't get some kind of reward for doing. Tell the collection agency that you will ONLY pay the collection if it is DELETED from all three credit bureaus.

[Anonymous]

Alright thats good info. I'll ask them to pull it if not, forget it.  Thanks!

[Anonymous]

Yes, paying a collection will yield a Paid Collection that remains for 7-1/2 years from DOFD.

Has the CA just recently contacted you?

Don't have a mortgage broker start pulling your credit report. The CA is likely monitoring your CR, and if they see "Bank of XYZ", "Mortgage Made Easy, Inc.", they'll figure they can demand the full amount and give you nothing in return.

[Anonymous]

Thanks, i am actually calling these fools right now.

[Anonymous]

Be sure you get any PFD promise IN WRITING. Do not trust anything these CAs tell you, even if their tongues are notarized.

[Anonymous]

Don't open your checkbook until you have a signed letter from the CA. And then, pay 'em with a USPS money order.

[Anonymous]

And be prepared to have your offer refused. Most collection agencies would rather see your nose rubbed in your mistakes for 7.5 years and walk away with nothing than help you clean up your record in exchange for a full payment. Dumb and counterproductive, but that's how these agencies are, for the most part.

[Neblett]

I have a question about this.

Say I have a delinquent electricity bill that got assigned to a CA in 2005.  The account will remain on my report until 2012, regardless of whether I pay it or not.  After 2012, can they sell it to another agency, placing it again on my report and keeping the debt active?  Do they end up just cutting their losses?  Do collection attempts stop after 7 years?  Am I still liable for the debt after 7 years?  And does there come a point at which collection agencies turn accounts over to lawyers? 

I guess I have several questions, huh?

But the main issue I have is: I have about 10 accounts in collections, with amounts still due, scheduled to drop off anywhere from 2011 to 2014.  I have a plan to take care of my bad credit debts by paying off/settling all these collection accounts.  Will that help AT ALL, with regards to my credit score?  Will it show any good faith intentions to potential lenders once these accounts are paid?  Or is it even worth the energy and financial strain?

I am paying off the Ford account because Ford agreed to change the status from my Repo to a Charge-Off if I kept the payment in their office rather than going off to a CA, and so far they have kept their word regarding this.  They are also allowing me to pay off the balance at 50%, in return for a "Paid in Full" status on the report when I've paid my half.

Is my plan good or stupid?

[Anonymous]

Actually, the OC can keep selling it to another CA, and another, and another, long before 2012. That won't change the fact that they cannot report any account 7.5 years after DOFD. If the OC, CA or CRA re-ages an account by updating the DOFD, then they are in violation of the law and you can bring a lawsuit against them.

In some states, the SOL is longer than 7.5 years. As such, a CA or OC can legally bring a lawsuit even though they can no longer legally report the TL on your CR.

There is an increasing phenomenon of JDBs attempting to collect on old debts past the SOL and past the 7.5 reporting period. Even lawsuits that you might need to answer in order to avoid a default judgement.

I believe a charge off is better than a repo, but not by all that much. You would do better getting the TL deleted completely and perhaps paying more on the account. Doesn't sound like you're getting all that great of a deal from Ford.

First line of defense with CAs should always be to DV them. CAs routinely violate the FDCPA, and if you can catch them in violations that's $1,000 of leverage in your favor per violation. That leverage helps you in negotiating PFDs.