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Need your input please....

JLL2104
Contributor

Need your input please....

Years ago when I was totally irresponsible and young I let a capital one card go into collections. I recently settled through a debt collector for 85% of what was owed. The debt is satisfied but still shows $290 balance. The chargeoff falls off my report this coming December. I’m not obligated to pay the balance but what could it do for my credit?
Message 1 of 9
8 REPLIES 8
coreysw12
Valued Contributor

Re: Need your input please....

The way I see it, you have these options:

 

1) Dispute it at the CRA website(s). Say that the balance is being erroneously reported as more than $0, when it was actually settled.

 

2) Call and/or send letters to the creditor, asking them to revise the record to reflect the account being settled.

 

3) Wait until December for the problem to resolve itself.

    Total Loan Balance: $58k / $65k

    Total SL: $42.4k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase Status: 3/24
Message 2 of 9
coreysw12
Valued Contributor

Re: Need your input please....

Honestly, I wouldn't expect your score to change much (if at all) by having the record corrected. The creditor is very likely NOT reporting the account as unpaid every month, since you paid it off. And a paid collection is not really that much better than an unpaid one.

 

The biggest change to your score will occur when the aount gets removed in December. You might be able to speed up that process by either calling the CRA to ask them to remove it earlier, or calling the colleciton agency to ask for a goodwill removal of the account. Worst case scenario, even if you don't get any of those things, you'll still be in great shape in December when it falls off your report on its own.

    Total Loan Balance: $58k / $65k

    Total SL: $42.4k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase Status: 3/24
Message 3 of 9
JLL2104
Contributor

Re: Need your input please....

Thank you Corey.

The account does show closed, just with a balance

Is there zero benefit in paying the ~$300?
Message 4 of 9
coreysw12
Valued Contributor

Re: Need your input please....


@JLL2104 wrote:
Thank you Corey.

The account does show closed, just with a balance

Is there zero benefit in paying the ~$300?

Honestly it probably won't change your score much when it changes to $0 from $300. But it couldn't hurt to poke the creditors and/or CRA's to have them revise it, you might get a small bump in your score.

    Total Loan Balance: $58k / $65k

    Total SL: $42.4k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase Status: 3/24
Message 5 of 9
Saeren
Mega Contributor

Re: Need your input please....

There is unlikely to be any bump and in fact if they fix it, FICO may treat it as a new delinquency and drop your score all over again. Since it’s coming off in December anyway, I wouldn’t dispute it. 





Message 6 of 9
DollyLama
Established Contributor

Re: Need your input please....

Don't dispute it. You settled for less than owed, so the collection agency has agreed to not pursue any legal action at any time in the future. Keep your $300. TU might do an early exclusion 6 mos prior to it aging off, the other two will probably wait till December.  If this is your only derog account on your file, your score will bounce a good deal when it is removed and file will be clean.

Message 7 of 9
JLL2104
Contributor

Re: Need your input please....

I wish it was my only derog. I have a capital one auto chargeoff that will be on there until March of 2021 and a student loan that will fall off around the same time. Thank you all so much for the info. I feel like I’ve found family
Message 8 of 9
DIYcredit
Frequent Contributor

Re: Need your input please....

If the  balance is from a collection,the balance  will not affect your Fico score weather  it is paid or not.If any account is reported as "settled for less than originally agreed" that is considered a serious derogatory and will affect your credit score is a serious way for as long as it is present on your cr.

Message 9 of 9
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