Should I pay off Collection accounts??

Anonymous · ‎01-31-2018

Good day everyone,

I'm still a newbie in the credit world, but I've been trying to rebuild my credit, somewhat slow moving, I was able to get couple credit cards from capital one and Amex, also able to lease a car from Acura with my mom as a co-signer, and I have not missed a payment on any account for over a year, but there is two collections on my credit report one is $722 and one is $462, the $722 is From old Capital One credit card, (I currently still have 3 cards with Capital One with total CL $7750.00) the last payment recorded I believe was something like 2013, and the $462 is from Credit One last payment was made Oct 2014. But the CA opening day one is 2015 and the other is in 2016, although I've made no payment nor settlement of any kind, they both showed an updated date of mid 2017

I know it's not alot of money, but two of my friends both in the financial field and very credit concious gave me two different opinions. One told me I should pay if off immediately to prevent them stay on my credit report, the other one told me Since it's been a few years since I made the last payment, and I already took the big hit when it went delinquent, I should just wait till SOL ends.

I need some advices. Thank you for all your help.

RobertEG · ‎01-31-2018

Date of any last payment is irrelevant to credit report exclusion of a collection.

The FCRA was amended over two decades ago to clarify that exclusion of a collection from your credit report is based on one date-certain, which is the date of your first delinquency on the debt. See FCRA 605(c). The debt collector is required to obtain and report the DOFD on the OC account to the CRA no later than 90 days after they report their collection. See FCRA 623(a)(5).

The collection must then be excluded no later than 7 years plus 180 days from the DOFD.

No other date, including any date of last payment or other reporting, is relevant.

The issue of whether to pay a collection is separate from its exclusion from continued appearance in your credit report.

Credit report exclusion does not negate the debt, and does not preclude the debt collector from continuing attempts to collect on the debt, provided they comply with any other provisions of law.

While credit report exclusion certainly shields the presence of an unpaid debt from discovery by others by simply pulling your credit report, a prospective creditor may become aware of the unpaid debt by means other than reliance solely upon a pull of your credit report.

It is common, for example, for mortgage lendors to ask for disclosure of any unpaid delinquent debt.......

Zolomon · ‎01-31-2018

the last payment recorded I believe was something like 2013, and the $462 is from Credit One last payment was made Oct 2014. But the CA opening day one is 2015 and the other is in 2016, although I've made no payment nor settlement of any kind, they both showed an updated date of mid 2017

These are my suggests:

1. Check your reports to see which collections are being reported to which bureaus.

2. Dispute the validity of these collections with the collectors. They have to validate within 30 days. If no response, you have grounds to have it removed until they validate it (if they can).

3. If validated, dispute the DOFDs (date of first delinquency) if they are incorrect or not listed.

4. If they're validated and correct, request and obtain an agreement to PFD (Pay for Delete) in writing with the original creditor to have them removed from your reports. When agreed, dispute with the bureas to remove your collections stating the debt was paid to the original creditor.

5. If the original creditor does not agree, request and obtain an agreement to PFD (Pay for Delete) in writing with the collection agencies.

6. If the collection agency agrees in writing, pay them. Then, write a GW (good will) letter to the original creditor requesting the debt to be removed due to hardship (because the collection dropped/PFD, but the original creditor is still reporting the charge off).

7. If no agreement for PFD can be obtained from the original creditor or collection agency, wait it out for the next 2 to 3 years (2013 - 2020, 2014 - 2021). Whether you pay it or not, it will remain on your report 7 years and 6 months from your DOFD (I waited with my $500 collection from 2010 cause they would not PFD).

Unfortunately, FICO 8 does not reward people for paying off collections and sometimes in doing so, you'll drop points even further. Some may say that waiting it out is unethical, but you've already offerered to pay them and they rejected (steps 4 and 5).

Good news in the future perhaps, FICO 9 will reward paid collections. They will be reported as paid and will not deduct from your score, if I'm not mistaken.

Personal cards:

Business cards:

Anonymous · ‎01-31-2018

So apparently both collections are reported to all 3 CRAs, For the $722 from Capital One EX and TU has a Date Assigned 11/18/2015, but on EQ it's Aug 2017 and the $462 from Credit One has Date Assigned 05/21/2014 for EX and TU but EQ shows Aug 2017 as well.

Credit One shows last Activity at Oct, 2013 and DoFD is Nov, 2013( I assume that was the date because I wasn't able to make payment at that time)

Capital One however, on my credit report I only see the 3 Cards I currently with them and they are all in good standing, I don't see the old Capital One card anywhere on my credit report, whether under open or closed.

Anonymous · ‎01-31-2018

You need to know the LEGAL statute of limitations before poking the bear. If SOL has passed then poke away - if not - wait it out.

As for SOL - you can be sued either in the county/state where you opened the card or where you currently live. Ex: opened card in VA (5 years), now live in MD (3 yrs). They can sue in VA during year 4 & 5.

Divide the at due by 84 then multiply by what left of the reporting period. That should be your offer and it should only be a PFD.

Anonymous · ‎01-31-2018

wrote:
Good day everyone,
I'm still a newbie in the credit world, but I've been trying to rebuild my credit, somewhat slow moving, I was able to get couple credit cards from capital one and Amex, also able to lease a car from Acura with my mom as a co-signer, and I have not missed a payment on any account for over a year, but there is two collections on my credit report one is $722 and one is $462, the $722 is From old Capital One credit card, (I currently still have 3 cards with Capital One with total CL $7750.00) the last payment recorded I believe was something like 2013, and the $462 is from Credit One last payment was made Oct 2014. But the CA opening day one is 2015 and the other is in 2016, although I've made no payment nor settlement of any kind, they both showed an updated date of mid 2017

I know it's not alot of money, but two of my friends both in the financial field and very credit concious gave me two different opinions. One told me I should pay if off immediately to prevent them stay on my credit report, the other one told me Since it's been a few years since I made the last payment, and I already took the big hit when it went delinquent, I should just wait till SOL ends.

I need some advices. Thank you for all your help.

If you have the means to pay them off. My advise. Takes away future lawsuits. May temporarily lose a few points when they update to $0. But it will recover. Paid or not it will fall off the report at the same time it originally would. Also makes for a clean future if you plan on getting a mortgage. Many times they will require you pay off any delequencies before they will give you a loan. It is up to you. You can wait till they fall off the report to pay. But that risks them taking you to court before that happens.

if paying id first talk to the collection companies and see if they will do a pay for delete. If so make sure to get that in writing. If they won’t budge it was worth a try.