Why is it when you pay off a collection account that is a "BAD" thing on your credit!?

Question

I hope someone can explain why paying on a debt makes your credit appear worse. I dont understand. If you were in the situation would you pay them or not... I started paying several medical bills in collection already. Is it too late to offer the option of payment for deletion? Any answers greatly appreciated. All my deliquents bills are medical bill due to 2 back surgeries during a period that I was unable to work and it was not w/c related so I got the royal u know what! Please help.

Answer 1

A paid negative is still a negative - no one gets good marks for it showing as a paid negative. Also, by paying, it updates the account making it look newer than it actually is (updating is not re-aging)

It's never to late to request deletion. Though they won't delete until the account is paid off.

It does make it a bit harder to request pay for delete when a person has already been making payments, but it isn't impossible.
It's even harder after the account is paid off since a person has no leverage.

You might also check your reports to see if they are reporting accurately. If they are reporting inaccurately, you have a legal right to dispute it.

There are many ways they can report inaccurately. For medical accounts, they cannot show medical information on your reports.

You might click on my profile and do some reading in the links I have listed for the FCRA, FDCPA, etc.

Answer 2

It's not that paying the bill makes it worse. It really boils down to the fact that, for whatever reason (they DON'T care unfortunately :( ) you had a bill sent to collection in the first place.

Up to a certain point, a notice of collection does not necesarily reflect badly. If you apply for a line of credit or a cell phone or some other activity that requires a credit check, often times you will have someone call you and ask you about the claims on your record. Although unlikely, some "claims" against you can be explained away (an example was a bill I had for cell calls I did not make -- the company I was buying a computer from accepted my answer, and the cell phone company EVENTUALLY had the claim against me expunged). However, when you begin to pay off a debt, it is an admission of guilt so to speak. You (in their eyes) messed up, and there is no question about it.

The good news is, when you finish paying off the debt, it will be erased after a certain period of time (depending on your state or province). Either way, a fully paid collection claim is not as bad looking as a partially paid one, or one that you haven't started to pay and can't explain away.

Hope this helps!

Answer 3

It's not. All it does is show activity on it and until you finish paying it off it's going to be active. Then it will take a few months for it to clear. Don't worry too much though. People (looking at your credit) will see that you paid it...eventually. And an unpaid medical bill actually doesn't hurt your credit as much as you think. Yes, it's bad for your score but creditors look at more than just that. Almost everyone has unpaid medical bills (I'm not saying not to pay it though). As long as you are good about paying utility bills and credit cards you should be good. There's a lot to credit and it isn't fair at all (even though they have the "fair credit bullshi...I mean Fair Credit Act") but don't worry. As long as you are care full you can repair/keep your credit in a positive way.

Answer 4

It is simple , if you pay it your admitting that you could not make payment. If you leave it unpaid there is a question of is this debt yours or not .thats how lenders look at it . If you paid the debt already , dispute it and it will be removed , all you have to say is debt in inaccurate please remove .Since the debt is paid the creditor will probably not even waste their time in to verify.