Hi everyone!
New lurker here 
The past year I have been working hard to increase my credit score and it is finally at 650+. However, I've been receiving mail and phone calls from a debt collector for $500. I believe this is from an old Nordstrom credit card and in my credit report, it says that the account has been charged off. However, I've been checking my credit reports and nothing has been reported on my reports from the debt collector agency. The collector is Real-Time Solutions and the current creditor is TD Bank. Does anyone have any past experience with them?
1. Should I pay the debt in full? If I do will that be reported on my credit report later on? I'm scared if I do pay in full that it will be reported on my credit report as paid in full and tank my credit score.
2. If I don't will I be sued in the future?
3. Should I contact Nordstorm to directly pay and will they report anything on my report?
Thanks so much!
Hi and welcome to the forums!
How old is the debt? Whether or not you can still be sued will depend on the statute of limitations (SOL) for debt collection in your state. If the debt has aged out of SOL, they can no longer sue you but can continue collection efforts - which may include reporting to the bureaus if the debt is still within the 7 year reporting statute.
If the debt is still within SOL - you should pay it to prevent legal action. You can pay in full or settle, whichever works for you financially. Its uncommon for a collection agency to begin reporting after payment satisfies the debt, but when negotiating terms of payment, you can try to request a condition to not report the collection after payment is received.
If the debt is outside of SOL, they cannot sue you but you may still want to clear the debt anyway to prevent having a collection pop up down the road. It's possible that the reason the current agency is not reporting is because TD still owns the debt and only transferred collection authority to the collection agency - it's fairly common for collection agencies to not report their own tradeline for a debt they don't own. TD could, at some point, decide to sell the debt - and at that point the purchasing agency will acquire ownership and may report in attempt to force payment.
Does the original Nordstrom tradeline still appear on your reports? If so, does it show an outstanding balance owed or is the balance $0?
I haven't dealt with Real-Time Solutions. But in general, my experience has been that when you take care of your debts before they hit your credit report, there's no incentive for the collection agency to report after it's paid. I've never had that happen. But, your best bet is to ensure the collection agency won't do it when you contact them to make the payment.
If you don't pay your debt, then there's the chance it will be added to your credit report and a chance you'll be sued as long as you're within the statute of limitations.
Thanks for the reply! I appreciate the help
I will like to pay in full and put this last debt in the past and move on with my life. On my credit report it says that it will be on record till so I believe it is still within the SOL.
In my credit report, it says the account was charged off. $536 written off. $529 past due. If I could pay Nordstorm should I go through them or through the collection agency?
I just don't want anything reported on my report that can lower my score 
@Anonymous wrote:Thanks for the reply! I appreciate the help
I will like to pay in full and put this last debt in the past and move on with my life. On my credit report it says that it will be on record till so I believe it is still within the SOL.
"On the record until" and SOL are not the same thing.
'On the record until' only tells you when the derogatory item will meet the 7 year mark to be removed from your credit reports. This 7 year mark is determined by the date of first delinquency (DOFD), which is the month/year the account first became delinquent and was never brought current.
SOL is the amount of time a creditor has to take legal action against an individual to collect a debt. This time-frame varies by state. You can google "statute of limitations for debt collection in *whatever state you're in*" to find out.
@Anonymous wrote:
In my credit report, it says the account was charged off. $536 written off. $529 past due.
Okay - appears the original creditor still owns the debt and only transferred collection authority to the collection agency. Once payment is made, the original creditor will update the tradeline to reflect 'Chargeoff/Paid, $0 balance'
Just for future reference: If the balance on an unpaid chargeoff reflects $0, then that means the debt has been sold to the collection agency. At that point, you can only deal with the collection agency because they have ownership.
@Anonymous wrote:.If I could pay Nordstorm should I go through them or through the collection agency?
Doesn't matter.
You can reach out to them and see if they'll accept payment - if so, pay them and confirm they'll terminate the collection agency's collection authority.
Sometimes, because of their contract with the collection agency, creditors will not accept payment and instead, refer you to the agency to make payment. But you can call and find out.
Or, you can just pay the collection agency directly. Once payment is cleared, they will advise the original creditor and the original creditor will update the account on your reports to reflect payment.
If I pay off the debt to Nordstorm and they put the owed amount to $0 - will this affect my credit score?
Or if I pay the collection agency will be put this in my credit report?
Sorry for so many questions! I just want to make sure this doesn't affect my credit score since I am looking to move out
@Anonymous wrote:If I pay off the debt to Nordstorm and they put the owed amount to $0 - will this affect my credit score?
The effect it will have on your scores depends on a lot of different variables but the two main ones involve the frequency of updates to the tradeline and utilization:
1. The update to the account could cause a temporary decrease in score if the account hasn't been updated in recent months. If the account has been recently updated (ie. a monthly update to the payment history reflecting a negative chargeoff notation), the final update is unlikely to cause a much of a decrease, if any.
Regular updates to a derogatory account will suppress your scores because it keeps the derogatory "fresh" when it comes to scoring - scores only begin to recover from derogatory accounts as those accounts age - updates keep it from aging. Paying the account prevents all future updates (after the final update to reflect payment) which will allow the derog to age and your scores to recover. So it's more beneficial in the long run.
2. The outstanding balance is currently factored into your total utilization - utilization has a large impact on scores. The elimination of this balance could reduce your utilization enough to result in an increase in scores.
3. You could lose points from the final update to the account and simultaneously gain points for the decreased utilization. If the points lost from the update exceed the points gained from reduced util, you'll have net loss in points. If the points gained from decreased utilization exceed points lost from the update, you'll have a net gain in points. Or - you break about even and have little to no score change at all.
No one can tell you for certain how it will shake out scorewise - every profile differs.
@Anonymous wrote:
Or if I pay the collection agency will be put this in my credit report?
As explained in my first response - it's very uncommon for a collection agency to suddenly begin reporting after a debt is paid. When you speak to them to arrange payment, you can confirm that no collection will be reported.
If you pay the original creditor directly, you'll need to confirm they will terminate the collection agency's collection authority.
@Anonymous wrote:
Sorry for so many questions! I just want to make sure this doesn't affect my credit score since I am looking to move out
Quite alright. Questions are good 😊