Old collection accounts?

Question

I have a few collection accounts dating back to 2004. I know that the ones that date back to 01-02 will come off soon.

Should I pay those 04 and up? Or would I be better off letting them all go and get a secured credit card to help my credit and score.

Or maybe pay the 04 and up and get a secured card.

I definately know not to pay old old debts say anything under 04 because they will come off in the next few years.

Answer 1

The reporting SOL (statute of limitations) for credit cards and most loans is 7 years.

Just because the accounts will fall off in 7 years does not mean that the collecting SOL has expired.

You need to find out if you are still within the collecting SOL for your state.

If you are still within SOL and you want to pay, always send a debt validation letter to the collection agency first. Be sure that they have the legal right to collect that debt and the amount has not been illegally inflated.

Never speak with them on the phone, always do things by mail and send it certified return receipt.

After they validate the debt, send a pay for delete letter requesting that they will delete any negative tradelines they have placed on your reports upon payment.

If you are past the collecting SOL, you have a legal right to send the a SOL letter. Which tells them the account is past the SOL for collections and to basically get lost.

If they are reporting inaccuracies on your reports (bet they are), when you get the green card back from requesting validation send a dispute to the CRA's (credit reporting agencys)

If you are still within the collecting SOL and you cannot pay, it would be best if you did nothing until the SOL has expired.

If you are still within the collecting SOL and you can pay, then pay. Just be sure that they state in writing that they will remove the negatives upon payment.

Things to keep in mind:

A paid negative is just as bad as an unpaid negative on your reports.

Just because you are past the collecting SOL in your state does not mean the collection agency cannot continue to try and collect.
It is illegal for a collection agency to sue on a time barred debt, but that may not stop them from suing if it is worth their while. (which is why sending a SOL letter if a person is out of the collecting SOL is very important)

While you are dealing with the negatives, it's not a bad idea to do the other half of credit repair at the same time by applying for the secured card. Though you should do your research on card companies and go with a reputable credit company to get the card.

edited to add - by going through your past questions, if you live in the state you listed then your SOL on credit cards is 3 years. The SOL for written accounts is 6 years (some bank loans)
Be very careful if you are dealing with written accounts and collections. In your state the collecting SOL can easily be reset.
(just by making a payment by check)

Answer 2

That isn't true. Collections sent to any branch of the credit bureau (equifax, transunion, or experian) do not simply "come off" your credit report until they are removed by the company who is collection the funds on the account and the only way they will remove those is by a payment, bankruptcy or a settlement of some kind.

If the account is left to drift in the abyss known as collections, a few different things can happen. 1 the credit card company or agency you owe money can "sell the account" and place it in a "charge off status". Sometimes if these places can find you they will take you to court eventually and force you to pay the balace by either a judgement or garnishment of wages depending on the amount owed. If they can't find you it is reported as "a loss as unable to locate consumer". When any company pulls your credit report for loans, rentals, credit cards or home purchase, either of these items look very bad and drag down your score no matter how much you have restablished your credit after the initial collection.

The credit card you open now will not "remove" or fully "repair" the damage done to your score. It will help show some re-established credit since your original default, but this will effect your ability to purchase homes or cars, rent homes and will usually mean higher intest rates on credit cards or loans in the future if you never go to collections again with any accounts you open from now forward and maintain them with timely payments or low balances.

Some real estate companies or rental agencies may require you to pay off any outstanding collections no matter how old before they will aprove you, or your deposits/morgage rates will be much higher that they should be.

The best thing for you to do is pay the balance, either yourself or through a debt consolidation company. However, some collection agencies will not accept a debt consolidation if the account is too old or too far past due. Its best to ask them first if they will accept the consolidation first. The collection agency may ask you to settle the case for a lower amount that the original balance--while this may seem like a good idea, it actually damages your score even more than just letting the account hang in limbo. Don't settle, pay the full amount. Usually the collection agency will break the balance up into payments for you.

Once its paid get a letter from them showing the account is settled and paid in full. This way if they don't report the payment to the credit bureau as fast as you need them too (it can sometimes take 30-90 days to be reported and cleared from your credit report) the letter will stand and keep your rates, payments and deposits as low as you deserve.

Answer 3

The best thing would be to pay the 04 and up because it will back your credit report look better.