I have a collection account on my credit report.?

Question

I totally disagree with it, and have fought it repeatedly, but the creditor and the credit beaureas wont budge. Its been almost 4years. If I pay it off does it help my credit in any way? Ive been told it could actually potentially harm my fico score and lengthen the period of negative reporting, if I pay after all this time, as the clock is supposedly reset when I pay and wether I pay or not its been there so long it has already done the damage? Any thoughts on this?
AlsoI filed bankruptcy in 2002, which was primarily due to suffering a medical illness and being unable to pay my bills. Is there any way I can add this to my credit file and would this help improve my fico score or should I just wait. And finally I asked before about secure credit cards. I got a few responses but they werent too helpful. Anyone know of a good secure credit card I can get that wont report to the credit beaureaus as a secured card?
Thanks for your help.

Answer 1

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Answer 2

I would have to agree with the others on the debt and bankruptcy issue.

If the debt was incurred and defaulted on after the bankruptcy, you might check your states collecting SOL to see if it is still within SOL. I have a link in my profile where you can find your states SOL.
If you are past the legal SOL for collections, you have the legal right to inform them the debt is no longer legally collectible.

Paying a negative will not re-age the reporting SOL !!!!!
While it will not re-age the reporting SOL, it will update the account (updating is not re-aging) When an account is updated, it makes it look newer than it actually is and will harm your scores.

A paid negative is still a negative, so if you plan on paying you should request that they delete the trade line upon payment

If you pay, be aware of your states statutes on paying past bad debts. Some states will allow the collecting SOL to be re-set upon a payment or an agreement to pay.
You should request, that they agree to accept a portion of the debt as payment in full.

Be sure to get everything in writing, especially their agreement that they will accept a portion of the debt as payment in full.

Do not deal with them on the phone, do everything in writing and sent certified mail return receipt.

Before you send a pay for delete letter, you should send a debt validation letter. Make sure the amount they are requesting is the correct amount, that they are licensed and/or bonded in your state if your state requires it and that they have the legal right to collect on that debt.


As far as a secured card, you should join a credit union. They usually have excellent secured cards that report as unsecured.
Or you might try Elan Secured Visa or Union Plus.

For what it's worth, FICO does not care if a card is secured or not. The only time it would matter is if a creditor does a manual review.

Answer 3

First was this debt before or after you filed for bankruptcy in 2002. If it was incurred before you could possibly add it to the previous bankruptcy you will have to get with your lawyer to have them file the correct paperwork. If it was incurred after you filed, you will not be able to add it.

Paying the debt is alway better to do, if it is a valid debt. If the debt is yours but you disagree with the amount you can try to negociate with the creditor to see if they will reduce the amount.

As for paying it off yes it will continue to be reported on for 7 years, but it will shown as paid with 0 balance which is much better than an account in active collections. Also, will have less and less effect as time goes on. However, if you keep it as an unpaid collections you are just killing your credit rating. Also, since you have no bankruptcy protection they probably will come after you in court and you will end up having to pay it anyways.

As for Secured Card look at Orchard Bank as they seem to have a pretty good program. I would stay away from Capital One as I have heard that they report you high balance as your credit limit which could hurt your score.

Answer 4

Paying of a collection is never a bad idea. Although this might generate a new report to the bureau, it would be a positive report. So I disagree with the advice you've gotten previously.

There are special rules about medical debt which might help you. You can always add your comment to your report. The problem is that some current programs pay no attention to your comment.

Answer 5

if your collection was anytime before the bankruptcy was discharged then there is NOTHING they can do (get with your attorney on this and make them clear it off) if it was after you have got some serious issues the bankruptcy and a collection report afterwards means you are extremly high rish and most places will not even consider you for a cc of any kind for at least two more years.

Answer 6

if this derogatory account was opened before you filed your bankruptcy then it should have been included. if it was not listed you can still send that company a copy of your bankruptcy papers and they should report it as being included next time they report to the credit bureaus. Also, are you fighting them in writing and are they responding within the 30 days they have to respond? if not, they have to automatically remove it.

Answer 7

You'll pay a high fee, but Aspen credit card will give you an unsecured card (with very little actual credit on it) that can help you rebuild credit. Go to MyAspenCard.com to apply. You will have to make an initial payment of 20.00 before they will activate the card, but it is worth it to rebuild credit. As far as the account in dispute, if it has been four years, has it been charged off? If so, I would not pay it because it will still show as a charge off, regardless of whether you pay it or not. Good luck and hope this helps.

Answer 8

Bankruptcy will stay for 10 years no matter what.