Will it do anything for my credit score if I pay a collection?

Question

I have had a heck of a time with medical bills as a result of several health problems that have started in the last couple of years. I have 4 medical bills listed on my credit report under Collections. They add up to a total of $335, and are all listed as 'closed' accounts. I have not paid anything on these, and they are all relatively new items on my report (the oldest is a year old). I'd like to pay these, however I've learned that paying them would turn them into more recent items, and I'd have to start the 7 year waiting clock over again.

My question is, if I were to pay these, would it help my report out at all? I know they will not be erased from my report, but I saw the pie-graph of what your credit score is based off of, and 35% is 'payment history'. Would it help that part of the score at all if I were to pay these? And 30% is 'amount owed'... will getting rid of that $335 help in any way?

Thank you.

Answer 1

Like some of the other posters mentioned, the debts cannot legally be reaged to report for a longer period than they normally would report, which with medical is 7 years from the date of service.
Paying and having it show on your reports as a paid negative will not help your scores for some time.

Regardless of what one poster stated, medical accounts are treated differently than regular money debts. Thanks to HIPAA a debtor has the legal right to pay the medical provider, in full, and demand that the medical provider recall the account from the collector The medical provider must then demand that the collector remove anything concerning the debt from their files and what they have placed on credit reports.
It does not matter if the debt is assigned or sold, they legally must comply.

If you plan on using your HIPAA rights you must not have any dealings with the collector. Dealing with them you could be waiving any protection you have under HIPAA.

You might click on my profile and click on the last link that I have listed and do some reading in the medical forum. The site is a free credit discussion forum where you can learn your HIPAA rights and how to use them.

Answer 2

Definitely pay off these debts. Since they are already assigned to a collection agency, most times the hospital or the original creditor does not have the right to speak to you about this debt. Paying for the collection in whole will look better than not paying and settling in full. Do not expect your score to go up within 30 days of payment. The collection agency has a certain amount of time to report the debt as well as consistent positive payments will slowly raise your score. I suggest getting a copy of your credit report from ALL 3 of the bureau es to make sure that it has been reported as pain in approx 60-90 days (each bureau will have slightly different information on you because not all creditors report to all 3). You can do this for free once a year at www.annualcreditreport.com. Otherwise, each bureau will charge you approximately $10 each time you check your own credit report (which DOES NOT affect your credit).

Answer 3

Having a collection account on your report does lower your credit score, but the older it is, the less effect it will have on it. Paying off a collection account will make it appear to be a more recent item, lowering your credit score! However, paying off a collection account does not 'reset the clock' so that you have to wait another 7 years for it to fall off your credit report! That is a myth.

If you're in a position to pay the collection accounts off, contact the collection agency in writing and see if they will agree to remove the derogatory items from your report in exchange for payment. Make sure you get an agreement in writing from the collection agency before sending any money!

Answer 4

Yes, it will help, because you still owe the money. The only reason they are showing not active is because they haven't put anyone on it to collect yet.

I would go to the original creditor (Hospital?) and try to negotiate a lower payoff. They usually will, rather than lose out completely.

All you need to do is have the credit reports have the word "Satisfied" on each of those accounts.

But yes, definitely pay them off.

Hope this helps.

Answer 5

Paying on any defaulted account does not re-start the seven year reporting cycle on credit reports....This is a common mis-perception. Being that this debt isn't that large...you might want to try paying it all off. Don't try to settle for less as your account would state "settled," which is a negative notation indicating that you did not pay the full amount.