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Question regarding CA account


Question regarding CA account

I had a private student loan fall into default approx. 3 years ago. The loan was transferred over to a CA agency. About two years ago I started a new job and made arrangements to pay down the debt with the CA and have been current on all my monthly payments to date. I have been throwing around the idea of getting a personal loan to pay off the remaining balance of the loan/collection account that is due. The thought behind this idea is 1) I can pay off the debt to the CA and not have to deal with them 2) I can establish a new revolving account which will help me build credit. Would this actually be beneficial or would I be wasting my time since the total amount of debt owed would remain unchanged and the CA will still be sitting on my credit report(s)? The account seems to be haunting me twice as I get negative marks from the original default being reported as "past due" and from the CA account being reported as "unpaid" until I pay off the entire debt. Just curious what I can/should do to get rid of this???


All advice is greatly appreciated!


FICO Scores as of 6/8/09

Transunion: 654

Equifax: 624

Experian: ???

Message 1 of 4
Community Leader
Legendary Contributor

Re: Question regarding CA account

I dont see the benefit.  You have terms with the CA that you are meeting.  You arent "dealing" with them anymore if you are meeting the terms of your CA agreement.  If you pay it off, it will not remove the CA from your CR, it will just result in their reporting it paid in full. Which, for FICO scoring, wont help.

If you get a personal loan, unless it is set up as a revolving line of credit, it will probably be an installment loan, and thus not factor into you revolving % util.  Plus, you will be paying nterest on that new loan.

Unless I am missing something, I dont see any benefit, financially or with FICO scoring.


Message 2 of 4

Re: Question regarding CA account

Hmm...Sounds like my money might best be used elsewhere to boost my credit. I was going to add a mix of money I have saved up + the loan to pay it off. But if it doesn't help much, might as well use my money elsewhere. Maybe an auto loan or secured credit card? The only debts on my credit report are student loans that are in various stages of payment/repayment. That and one Orchard Bank card which is current w/ no late payments. I will peruse the forums to figure out a way to boost my scores. Thanks for the advice!
Message Edited by mxriderbp on 06-08-2009 10:20 PM
Message 3 of 4
Established Contributor

Re: Question regarding CA account

I'm in the same situation.  NCO is my CA.


You can make PFD offer, especially since the OC is still reporting.  If you've been good, making your payments for a couple of years now, then they might do you the favor.


Might be worth it to pay it off, if they'll delete the CA reporting . . .  The PFD wouldn't do anything about the OC, but those CAs are probably really hurting you.

Message 4 of 4