Pay for delete questions...

[firedogut]

i'm helping my sister with some credit issues.    She about to by a house and after pulling her report we saw that they are a some items in collections.

two items are both reported by CREDIT SYSTEMS INTL INC

1. power bill that was first reported late in 8/2004

2. medical bill first reported late in 1/2009

Sister had no clue about these items.  never recieved anything in the mail.   not even sure if they are her debts

a 3rd item is held by CMRE Financial Services  also a medical bill reported late 12/09.  aslo not sure if it is really her debt

so the 1st two items add up to like $90.   She is willing to pay in full if they agree to delete it.  

the 3rd item is for like $300.  she is also willing to pay for delete.

how long does it take to be removed?   How long does the CA have to delete it if they agree? 

[Anonymous]

Since they are not legally obligated to delete, it would be a negotiation period. You can send a PFD letter CMRRR, and wait. If you don't hear back, send another one. Basically all they are legally obligated to do is 5 days of initating contact with you you are to receive a dunning notice (which if you haven't received anything, you should wait for a seasoned FICO member to offer their opinion of why they posted to her credit report and never initatied contact to obtain the debt.)

Since their job is to get the money, that is all they will try to do. Sure you can offer a PFD, if they accept it's a win-win. If you hold out and refuse to pay unless they delete, then you're working on negotiating with them. Do not agree to pay for updating the credit reports to reflect Paid. It won't help the score, in fact it will most likley cause a ding on her scores for the recent activity to the account. Unless, her scores are good right now to qualify for a mortgage, and then the lender can see they are paid when they review her file. Be sure that if her scores are good enough right now before paying, you ask a lender before contacting any CA what to do. Sometimes, because paying a CA and allowing them to update the report as Paid will cause a ding due to the recent activity on the account. Ask the lender if there is a way to pay the CA before closing after she was approved and is signing on the house. That is usually how lenders will approve a loan, even though she has a high enough score. They will say contingent on the fact she pays all collection accounts before closing.

If her scores are good enough, contact a lender before initiating contact with a CA. If her scores aren't and needs to be polished up, send a DV letter to all collection agencies, especially if she believes they aren't hers. After getting validation of debt, then she can begin sending PFD letters.

Those two recent medical debts that she doesn't believe are hers should be top priority. They are so recent, they really are hurting her score, history and profile. Send DV letters and if they are in fact hers, begin PFD. If they aren't, they should be deleted by the CA. Hopefully you won't have to begin the dispute process through the CRA's.

[firedogut]

So there might a negative side of asking for a pay for delete.  

all the debts get updated every month as unpaid and late. 

I'm guessing she never got anything because she moved about a year ago.  They might have sent the notice to the old address.

right now she is borderline. one score is 670 and one is 685.   because of an issue with experian combining her info with someone else the score has been tossed out.   if she can get both scores above 680 they won't require 20% down.   

she needs to close by may 31st so that she can get the 8k home buyer credit.   so paying less then 100 bucks to get two items removed might be money well spent. 

[LIGHTNIN]

Hi firedogut,

Ask her to contact the OC's about these debt. If the OC still owns the debt, pay the OC instead of the CA.

But make sure to ask the OC to pull back the CA. Get everything in writing.

Also with the electric bill......it a final bill right?   Make sure she keeps it, you never know when you may need it, to show proof it was paid.

She doesnt know if these are her bills......When she contacts the OC, she should know whether they are hers or not.

It can take 30-60 days for the CA to delete, everyones situation is different.

[LIGHTNIN]

The 8k extension she would need to close by June 30,2010 to quality for the credit.

[firedogut]

so thinking this could get done in the next 2 weeks-30 days is wishful thinking.

if we can't get things removed before she buys thhe house then it might be pointless.   we might wait unitl the house in bought then work on fixing the issues.