I know that Collections on your credit report lowers your score. I heard that if they are left unpaid, it doesnt do anything and you canleave them unpaid for however many years til they disappear off your report. Is that true? Or is it better for your score to pay them? Help!
2007-02-15 12:48:57 · 4 answers · asked by Barefoot 6 in Business & Finance ➔ Credit
If you have an account that is in collections on your credit report paying it off will NOT help your credit score! In fact it will lower it, because paying it off will reset the clock and the derogatory item will be more recent. The older the collection accounts are on your credit report, the less damaging it is to your credit.
Do not pay a collection agency unless they agree to remove the negative item from your credit report and you are prepared to pay them off in full. If you go this route, try to get them to settle for 25 cents on the dollar. Make sure you get the agreement from them in writing before sending payment!
Depending on your situation, you may be better off just leaving it unpaid. The collection account/charge-off will disappear from your credit report 7 years from the date you were first 30 days late and never made a payment again.
2007-02-15 14:02:39 · answer #1 · answered by ? 4 · 0⤊ 0⤋
If you owe the money call the collection agency and offer them 30 cents on the dollar, don't go higher than 40 because they only pay 10 to 15.
If you don't own the money the choice is yours. I have 2 bad credit card reports on my score and they have been there for 6 years as the collection agencies just keep selling them off to another agency. They are not legitimate but there is nothing I can do to get rid of them. This is a tactic that is used by collection firms to steal money from people. It shouldn't be allowed but the politicians are all in the pockets of Finance. So, you can suck their ***** and fold or you can live with it. I have purchased 2 houses and have 3 credit cards. They don't seem to effect my credit too much, but of course, the economy is in the toilet; if it picks up it will be a different story.
2007-02-15 12:57:58 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Derogatory trade lines remain on your credit reports for seven years. A collector may sue you in civil court if the debt is within the statute of limitation. In some states it is as little as three years, and in some as many as 15 years.
2007-02-15 12:54:54 · answer #3 · answered by Ti 7 · 0⤊ 0⤋
7 years in standard but it is best to pay them so that every one else’s interest payments don't go up because of people who don't pay their bills. That would be the fair thing to do.
2007-02-15 12:55:37 · answer #4 · answered by Johnny 5 · 0⤊ 0⤋