Pay in Full or Settle Collections

[Anonymous]

My credit score is currently around 650 and I'm working to raise it within the next six months. I own a home and have no car payment and very little debt. I do have a history of bankrupcty and not great credit decisions in the past. I have a collections in the amount of $255 from an old apartment (debt is one year old). Should I pay this in full? I've heard the jump in points for paying in full isn't much more than settling. 

[StillKicking]

It's $255. Pay in full and move on with increasing your scores.

[Anonymous]

If it is being listed as a collection I would contact the rental agency to settle this in writing with the original company for a deletion.I would not settle with the collection as this my stay on your report as settled.

[satio]

If the collection item trade line is going to be removed as a result of it being paid then it would not matter whether it’s PIF or settled as it will be gone.

Given the amount and the fact that you don’t seem to have any dispute about it being valid I would just PIF.

I would confirm that for my PIF the trade line will be requested to be removed from the CRAs by the CA.

[FirstAscent]

If you're just after trying to get a higher score, PIF vs settling has had no different affect on credit scores whatsoever. This is just in my personal experience. 

When I was cleaning up my past collections, I settled on most of them due to this but did pay some in full. 

However, PIF is a helpful bargaining chip if they will remove it from the CRA's!

[Anonymous]

I do have a dispute, but it's a small amount and would rather get rid of it. I would really like to purchase a car within 6 months (my family has been using one car for years now). 

[FirstAscent]

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@Anonymous wrote:

I do have a dispute, but it's a small amount and would rather get rid of it. I would really like to purchase a car within 6 months (my family has been using one car for years now). 

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Ah, in the case of trying to get new credit, a PIF can help. Not necessarily with a point increase but new lenders sometimes like to see past items PIF instead of settled. This is case by case basis however depending on the lender. 

And since it's a relatively small amount, might as well just PIF. But definitely try to get them to remove it for a PIF.

[Anonymous]

She stated it would be removed when PIF. Do you ask for a letter stating this?

[FireMedic1]

Whos the CA? If its Portfolio or Midland they will PFD and usually dont send out letters

[Anonymous]

National Credit Systems

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@FireMedic1 wrote:

Whos the CA? If its Portfolio or Midland they will PFD and usually dont send out letters

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