Help With Collections Account

[Anonymous]

Hello everyone. I'd really appreciate help for an issue that came up within the last few days.

Here is the situation:
My wife and I are trying to get ready to buy a home by March of 2020. Part of that is trying to get my credit in a position where I can get a decent interest rate when the time comes. The bottom line is, I really screwed up when I was about 21 years old. I got introduced into the credit world and lost my job shortly after. As a result, I defaulted on all my payments and they went into collections/charge off status.

That was about 5 and a half years ago...Yesterday, I recieved a letter stating one of my debts was picked up by a collection agency and they were notifying me that I have 30 days to challenge  the debt. If I do not challenge, it will be assumed to be mine and they will start reporting on my credit.

My question ultimately is: Is there a way I can prevent this from showing up on my credit report as a collection? It is already on there as a charge off but I fear that the double hit of a charge off and collection will totally bomb my credit score.

Are they even allowed to report it as a collection even though its about 6 years old? I know it ages off at 7 years, but I assumed beyond the statute date, they could no longer bring it up as a new collection. Does anyone have insight on this or what I can do here?

The total bill is 900 dollars and they offered a 50% discount at roughly 450 dollars. Id even be willing to pay the whole **bleep** thing of just to avoid it pinging my credit.

Thanks!

[Remedios]

Hi and welcome to the forums @Anonymous 

Call them and offer payment in exchange for non reporting. They could have started reporting already if they wanted to. The period during which debt can be validated has nothing to do with reporting. 

As far as if they can report a 6 year old debt, the answer is yes, they can. It can be reported until 7.5 years from DOFD, but derogatory accounts are usually removed at 7 year mark. 

You could get a copy of free annual credit report and try to figure out the exact DOFD in case you decide not to pay. That way you'd know when it will be removed, should they start reporting 

Another thing, just because debt can no longer be reported, it does not mean that collection agencies cannot continue with their attempts to collect indefinitely. 

If they do start reporting, it wont be pretty scoring wise. 

So, you can either pay the settlement offer or allow it to report and wait it out. 

[RobertEG]

They can report their collection at any time after they received collection authority.

They are extending you a courtesy (which, from their perspective, is an incentive to pay immediately) by waiting until after expiration of the validation period before reporting.

To ensure that they dont report, you can contact them and add the additional provision that, if you pay by date X, they agree not to report a collection to any CRA.  That will ensure that they dont report.

If you get both a settlement for less and a pay for not reporting agreement, that would be a good deal......

[Anonymous]

Thank you both for the insight.

Would it be a more worth while excercise to call the original creditor and negotiate a closure or withdrawl of the collection? (First Premier)

Or should I call First National Collection Bureau (Which is the collection agency)?

After reading through the letter again, they did not state that they will not report it to my CR. However, they do say if I do not respond within 30 days of recieving the letter, the debt will be assumed to be mine. I am assuming this is something different then?

Thanks