Okay for once im actually able to start paying off the collectors and my debit but i wonder is it better to pay the full amount like 500 dollars or is it better to settle for like 250? Does that change anything? will my score not improve as much? Basically is it better to pay off the total or settle or does it not matter?
2007-02-01 07:01:04 · 2 answers · asked by bleeding_pen 1 in Business & Finance ➔ Personal Finance
My suggestion is to SETTLE. When you are ready, tell them you would like to know what amount can be settled upon for full payment of the account. Also, it is very VERY important that you ask them to give it to you in writing and always keep your paper trail of the payments. Once it goes to a collection agency, your account can be sold over and over and it could possibly be sold while you are settling with say, ABC collection. They sell to DEF collection, but ABC will not let DEF know it has been settled with them. You will need to be able to prove to DEF that it was settled with ABC. At first you will not see an improvement on your credit score because the scoring system will first recognize activity on a derogatory tradeline. However, it will in time show paid (get your free annual credit report to confirm that the account balance has been updated to show paid) and then your score will begin to improve. If it takes you 6 months to settle all of your debts, I would say wait 10-12 months before you see a noticable improvement - again making sure any paid collections have not been sold, and all the accounts are showing paid. Good Luck, and congratulations on your improving personal finances!
2007-02-01 07:11:53 · answer #1 · answered by loan_wzrd 2 · 0⤊ 0⤋
It will show as a cleared debt on your score, so it probably won't make a big difference. Offer them $250 to settle the debt and see what happens. Some places won't settle for anything.
2007-02-01 15:05:55 · answer #2 · answered by zippythejessi 7 · 0⤊ 0⤋