Collections tricky question

[Anonymous]

If I'm NOT paying in full to delete, should I SETTLE for less on a 3 year old collection ? It will stay on my credit anyways ...

[Anonymous]

I would only pay a collection if they delete. Settling does nothing to help your credit. The damage is done. 

[Anonymous]

I would think that on a manual review , it would help to see settled for less rather then still owing money someone while trying to get a loan from someone else . 

[Jnbmom]

@Anonymous 

Some companies do not delete . Settling a debt and having it marked paid looks much better than an unpaid debt .

Score wise no help, but manual reviews and loans down the road paid will factor in .

[RobertEG]

If a collection remains unpaid, then each and every updated reporting made by the debt collector extends the reported time since first delinquency, and thus, similar to an OC account going from 60 to 90-days late, increases the negative scoring impact.

However, once paid (either in full, or settled for less), any reporting will no longer have a curent delinquency status, and thus will not extend the period of delinquency.

Thus, paying has the future benefit of allowing the collection to begin to age rather than to continue to extend the period of delinquency.

[Anonymous]

@RobertEG This is in conflict with published information from MyFICO:

https://www.myfico.com/credit-education/faq/negative-reasons/should-i-pay-my-collections

According to this for collections, "[a]s far as your FICO Score is concerned, two things are considered:

• has a collections appeared on your credit report
• when it was reported"

According to MF, whether or not it's been paid is not a factor, unless I'm misunderstanding. Please teach me and explain. (I am aware on version 9 a paid collection doesn't matter, but we're talking about version 8 and prior.)

I'd be appreciative of any information, as the majority of my chargeoff theory is based on what I've learned from your posts. And I understand the above to be the process for chargeoffs, but not collections.

[Remedios]

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@Anonymous wrote:

@RobertEG This is in conflict with published information from MyFICO:

https://www.myfico.com/credit-education/faq/negative-reasons/should-i-pay-my-collections

According to this for collections, "[a]s far as your FICO Score is concerned, two things are considered:

• has a collections appeared on your credit report
• when it was reported"

According to MF, whether or not it's been paid is not a factor, unless I'm misunderstanding. Please teach me and explain. (I am aware on version 9 a paid collection doesn't matter, but we're talking about version 8 and prior.)

I'd be appreciative of any information, as the majority of my chargeoff theory is based on what I've learned from your posts. And I understand the above to be the process for chargeoffs, but not collections.

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It's right under "when it has reported".

"Was" is not in reference to single event but to "when it was last reported".

Most unpaid debt updates regularly.  When it remains unpaid, each month extends delinquency further from DOFD, keeping scores suppressed. 

Occassionally,  they will stop reporting, but then they end up being sold, new CA starts the reporting cycle all over again. 

[Anonymous]

@RemediosBut when it is reported has nothing to do with whether it’s paid. And even if it updates monthly, that doesn’t change when it was reported, which is when it was opened.

It doesn’t say when it was last updated; it says when it was reported. Totally different.

And that’s when the recency component comes in to play to change it from a recent PR scorecard to a mature PR scorecard.

Help me understand if I’m missing something.

[Anonymous]

Crazy ! I don't understand a word you're saying after I settle I will just pay one of those companies to send letters 

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@Anonymous wrote:

@RemediosBut when it is reported has nothing to do with whether it’s paid. And even if it updates monthly, that doesn’t change when it was reported, which is when it was opened.

It doesn’t say when it was last updated; it says when it was reported. Totally different.

And that’s when the recency component comes in to play to change it from a recent PR scorecard to a mature PR scorecard.

Help me understand if I’m missing something.

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[Anonymous]

@Anonymous In my opinion, if you’re not getting a pay for delete there’s no scoring purpose in paying a collection. Out of all the thousands of threads I’ve read, I haven’t found one where paying a collection, specifically without it being removed, caused a score change.

I’m about to go do some more searching.