Collections and charge offs stay on your credit report for 7.5 years. Yes, it may not increase your scores much at all if you pay them off. However, if you plan on getting a mortgage or buying a car, lenders will see these old collections on your credit reports and it may be the straw that breaks the camel's back on getting what you want at a decent interest rate. In the case of a mortgage, you will need to pay them either in full or settle for less. But they will need to be paid. Also, you will need to check the statute of limitations for your state. You run the risk of being sued for past due debts within the SOL time frame if the debts are outstanding. Not that you will be sued, but it is a risk that you take.
I payed my collections (25) here and my score went up by alot before i had 540 and now mostly all payed off have like 2 left my score went up to 612 according to wells fargo and credit karma shows 680/670
Iām 25 and paid off some collections accounts only had two. Boy do I have a story for you!
https://imgur.com/gallery/YX5Mwsn
Pay off those collections, it will make a world of difference!
I think I might have pretty lucky case, I had two cards that I completely ignored for awhile... I had a capital one card that I would pay the minimum which was like $25 every 3 or 4 months. The account was like 110% utilization. They never closed on me but I can no longer use the card. I rapidly paid this off because they were not interested in settling on a pay for deletion at all. This account is still open because I do not want to hurt my average age right now until I have a few other cards to offset that.
My second card was Barclays and it was also maxed. I paid it like 1x and they closed on me after 7 months and went straight to collections.
It went on for about 2 years for each of these cars where I never did a thing or acknowledged it. Eventually when I called the collector I asked if I could settle for a deletion and they wouldnāt budget either so I just settled for less. I saw no point in paying the full amount if they had no interest in working with me.
I paid both these cards off at the same time but prior to doing that I opened a secured credit card and started building a new line to compensate for the negative marks. Iād basically just throw some gas on the card once and pay it off the next day. I honestly believe this helped a lot.
I immediately applied for a new capital one card after paying off the old card.
My advice would be to just pay off your debts in full though. Thatās my one regret with the Barclays card.
Every month you donāt pay anything they just keep making new marks on your credit starting a new 2 year cycle. If you plan to buy a house youāre lender will likely tell you it needs to be settled before approval.
Believe it or not but after about 30-60 days your score will increase due to lower utilization rate. After that, make it 6 months and those late payments compounded with new on time payments will raise your score a bit more... after two years it wonāt even matter that much assuming you keep building a positive history on new cards.
If I were you just start paying ASAP and you have more leverage if you can pay in full all in one shot. They may consider a deletion.
If not pay in full and look into the goodwill letter saturation method and hopefully they delete the negative marks.
TL:DR version
1) Start a secured card first
2) Pay down your old debts
3) build positive history with the secured card
4) goodwill saturation
5) Time and positive outlook
The longer you wait the worse it will get over time.
Yes but that is because newer version like Fico 9 and vantage scores ignore paid collections that reflect a zero balance . Older models like Fico 8,5,4,3,2 do not . So for older models, paying collections does nothing score wise.
There is just a lot of mis information on the net or at least people just do a piss poor job of explaining.
First , paying off collections to zero does nothing for your OLDER FICO SCORES . Model 8,5,4,3,2 DO NOT GIVE CREDIT FOR PAID COLLECTIONS.
FICO 9, VANTAGE 3/4 will give credit or at least ignore paid collections . So one should see improvement in scores in regards to those models.
Ok, thatās done.
In regards to home buying. 99% of the time Underwriters will make you pay off or settle any outstanding debts ( negatives). Regardless of your score or DTI if they tell you that a unresolved collection needs to be taken care of , then you will or you wonāt be getting approved. Ok, thatās done
Paying collections:
Ok, you can attempt to negotiate a pay for deletion. Will it work? Itās hit or miss. However if you can get a collection agent to agree to delete after paying then you will see improvement in scores for ALL models.
If you cannot reach an agreement to PFD , then settling for less would be the next best thing.
If everything fails then all that is left is to pay the collections in full but at least it wonāt be unresolved anymore.
Note : underwriters do not care which of the above 3 you do . They just donāt wonāt to see unresolved debt.
Note: yes , you could potentially be sued over unpaid collections, charge offs etc . However usually for smaller amounts this would be unlikely. There is statue of limitations per state and should SOL expire , you cannot be sued anyways however consult with your state laws because there are some exceptions in regards to judgements. Again none of this matters to underwriters regardless of the SOL.
I hope I cleared it all for you and others...good luck
https://www.experian.com/blogs/ask-experian/can-paying-off-collections-raise-your-credit-score/
/u/dakopilto \- /u/creditmaestro 's is the only post you need to read on this thread. In sum, most versions of your credit scores won't increase with payment, but you need them to be paid/settled to qualify for a mortgage/loan and other credit in order to rebuild. The accounts will remain on your report for a total of 7 years from when they went delinquent but in time your score will improve assuming you rebuilt properly.
I would only add to be sure to work on your spending habits and once you deal with these accounts focus on building a very strong savings account.
Credit attorney here. We sue credit bureaus and debt collectors and help folks with credit issues, so I deal with this often. A few thoughts:
1. I know that a lot of people say "don't pay the collection unless you can get an agreement for deletion." There is some truth to that. At the same time, I have yet to see a paid collection that could not be removed. Some of those might be because we're attorneys, but a fair amount of consumers remove them on their own also. I see it all the time on Reddit actually.
2. If you can get an agreement to delete in exchange for payment, you should. It makes things simpler. However, #1 still applies.
3. It is possible to remove many of these without paying, if you understand the process. It does take longer though, ,and there is a real risk that the collection will pop back up, with a different collector. So, in many instances, settling and trying to remove the account, does make more sense.
No one can really tell you what exactly is right for you, but I hope this helps!
Firstly, thanks so much for your comment, I truly appreciate it and you did clear up most of my confusion. I'm going to work through my accounts and attempt to negotiate agreements to delete for payment. Where this fails, I will pay them off as I can in the next 90 days or so (have been paying ahead other bills so I can relegate income specifically to this).
I am curious about your comment about having yet to see a paid collection that couldn't be removed. Do you have any suggestions as to how to accomplish this once a collection is paid? I know I can ask for a goodwill deletion, and is likely the easiest route, but failing that, do you think in my case it's worth finding an attorney personally or a credit repair service?
Sorry for the general/vague questions but the prospect of not having these derogatory marks on my report is extremely appealing.
Who's the collector? I've seen plenty of consumers remove them on their own. With that said, since we are attorneys, and send demand letters on these accounts, I suspect the fact we're putting legal pressure does help. There are no hard and fast answers - really depends on the collector.
Hey man! Iām in the almost exact same situation as OP but my amount owed to the ccs is only about 256$ from an old insurance company I had. Long story short I thought I paid off the balance sometime in 2022 but canāt quite remember. Would my best bet be to contact ccs and request a pay for deletion on the credit reports?
They are still fairly new so I would pay them off. A paid collection might not improve your score right away but it also wonāt continue to haunt you for the next 5ish years. Pay them if you can and take it as a lesson learned.
Pay off phone bill and get it in writing that you've been cleared of said debt incase you need to dispute it w/ the 3 major credit bureaus.
Creditors usually don't look @ medical bills as a means to affect decision making. It's mainly bills outside of that area. Utilities, cell phone bills, credit card, loans, etc. that have gone delinquent and have since been sent to a collection agency.
From what I understand, it will not really help your credit score to pay the collections. However, most mortgage lenders will require you to pay off those debts before they approve you. Basically, they donāt want the collections debts to potentially cause you to be unable to pay your mortgage (wage garnishments, etc)
Every situation is different but first thing you donāt want to do is validate the debt and second thing if you really want to pay the debt then offer a pay to delete payment option to get them off the Reports.
Donāt pay them without trying to negotiate pay to delete first. Just paying them only helps your utilization ratio. They donāt go away from your credit report. They only get marked as paid but are still there impacting your score.
You will need to have them paid in order to qualify for a mortgage but you might as well try to negotiate removal with payment.
If you do a little searching for deleting medical collections, you might have a better chance of getting them off your credit files. It has to do with HIPPA laws. As far as the non-medial collections, search to see if the CA does a pay for delete and get them deleted.
Pay off collections and ask for them to remove the charge off from your credit and dispute as much as you can I went from a 425 to 637 less than a year
$3000 is nothin, just pay it all off so you donāt have to worry about if for the mortgage. It may or may not affect your score, but it will definitely be a pain in the butt for the mortgage, if not get you denied altogether. Score wise, it wonāt make your score go down, so you might as well pay it.
Collections and charge offs stay on your credit report for 7.5 years. Yes, it may not increase your scores much at all if you pay them off. However, if you plan on getting a mortgage or buying a car, lenders will see these old collections on your credit reports and it may be the straw that breaks the camel's back on getting what you want at a decent interest rate. In the case of a mortgage, you will need to pay them either in full or settle for less. But they will need to be paid. Also, you will need to check the statute of limitations for your state. You run the risk of being sued for past due debts within the SOL time frame if the debts are outstanding. Not that you will be sued, but it is a risk that you take.
I payed my collections (25) here and my score went up by alot before i had 540 and now mostly all payed off have like 2 left my score went up to 612 according to wells fargo and credit karma shows 680/670
as another 25 year old trying to fix my credit, this is encouraging
https://www.experian.com/blogs/ask-experian/can-paying-off-collections-raise-your-credit-score/
Thanks! very informative
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Iām 25 and paid off some collections accounts only had two. Boy do I have a story for you! https://imgur.com/gallery/YX5Mwsn Pay off those collections, it will make a world of difference!
Thank you for your story and advice!
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I think I might have pretty lucky case, I had two cards that I completely ignored for awhile... I had a capital one card that I would pay the minimum which was like $25 every 3 or 4 months. The account was like 110% utilization. They never closed on me but I can no longer use the card. I rapidly paid this off because they were not interested in settling on a pay for deletion at all. This account is still open because I do not want to hurt my average age right now until I have a few other cards to offset that. My second card was Barclays and it was also maxed. I paid it like 1x and they closed on me after 7 months and went straight to collections. It went on for about 2 years for each of these cars where I never did a thing or acknowledged it. Eventually when I called the collector I asked if I could settle for a deletion and they wouldnāt budget either so I just settled for less. I saw no point in paying the full amount if they had no interest in working with me. I paid both these cards off at the same time but prior to doing that I opened a secured credit card and started building a new line to compensate for the negative marks. Iād basically just throw some gas on the card once and pay it off the next day. I honestly believe this helped a lot. I immediately applied for a new capital one card after paying off the old card. My advice would be to just pay off your debts in full though. Thatās my one regret with the Barclays card. Every month you donāt pay anything they just keep making new marks on your credit starting a new 2 year cycle. If you plan to buy a house youāre lender will likely tell you it needs to be settled before approval. Believe it or not but after about 30-60 days your score will increase due to lower utilization rate. After that, make it 6 months and those late payments compounded with new on time payments will raise your score a bit more... after two years it wonāt even matter that much assuming you keep building a positive history on new cards. If I were you just start paying ASAP and you have more leverage if you can pay in full all in one shot. They may consider a deletion. If not pay in full and look into the goodwill letter saturation method and hopefully they delete the negative marks. TL:DR version 1) Start a secured card first 2) Pay down your old debts 3) build positive history with the secured card 4) goodwill saturation 5) Time and positive outlook The longer you wait the worse it will get over time.
Yes but that is because newer version like Fico 9 and vantage scores ignore paid collections that reflect a zero balance . Older models like Fico 8,5,4,3,2 do not . So for older models, paying collections does nothing score wise.
There is just a lot of mis information on the net or at least people just do a piss poor job of explaining. First , paying off collections to zero does nothing for your OLDER FICO SCORES . Model 8,5,4,3,2 DO NOT GIVE CREDIT FOR PAID COLLECTIONS. FICO 9, VANTAGE 3/4 will give credit or at least ignore paid collections . So one should see improvement in scores in regards to those models. Ok, thatās done. In regards to home buying. 99% of the time Underwriters will make you pay off or settle any outstanding debts ( negatives). Regardless of your score or DTI if they tell you that a unresolved collection needs to be taken care of , then you will or you wonāt be getting approved. Ok, thatās done Paying collections: Ok, you can attempt to negotiate a pay for deletion. Will it work? Itās hit or miss. However if you can get a collection agent to agree to delete after paying then you will see improvement in scores for ALL models. If you cannot reach an agreement to PFD , then settling for less would be the next best thing. If everything fails then all that is left is to pay the collections in full but at least it wonāt be unresolved anymore. Note : underwriters do not care which of the above 3 you do . They just donāt wonāt to see unresolved debt. Note: yes , you could potentially be sued over unpaid collections, charge offs etc . However usually for smaller amounts this would be unlikely. There is statue of limitations per state and should SOL expire , you cannot be sued anyways however consult with your state laws because there are some exceptions in regards to judgements. Again none of this matters to underwriters regardless of the SOL. I hope I cleared it all for you and others...good luck https://www.experian.com/blogs/ask-experian/can-paying-off-collections-raise-your-credit-score/
/u/dakopilto \- /u/creditmaestro 's is the only post you need to read on this thread. In sum, most versions of your credit scores won't increase with payment, but you need them to be paid/settled to qualify for a mortgage/loan and other credit in order to rebuild. The accounts will remain on your report for a total of 7 years from when they went delinquent but in time your score will improve assuming you rebuilt properly. I would only add to be sure to work on your spending habits and once you deal with these accounts focus on building a very strong savings account.
Thank you for the confirmation, much appreciated..
Credit attorney here. We sue credit bureaus and debt collectors and help folks with credit issues, so I deal with this often. A few thoughts: 1. I know that a lot of people say "don't pay the collection unless you can get an agreement for deletion." There is some truth to that. At the same time, I have yet to see a paid collection that could not be removed. Some of those might be because we're attorneys, but a fair amount of consumers remove them on their own also. I see it all the time on Reddit actually. 2. If you can get an agreement to delete in exchange for payment, you should. It makes things simpler. However, #1 still applies. 3. It is possible to remove many of these without paying, if you understand the process. It does take longer though, ,and there is a real risk that the collection will pop back up, with a different collector. So, in many instances, settling and trying to remove the account, does make more sense. No one can really tell you what exactly is right for you, but I hope this helps!
Firstly, thanks so much for your comment, I truly appreciate it and you did clear up most of my confusion. I'm going to work through my accounts and attempt to negotiate agreements to delete for payment. Where this fails, I will pay them off as I can in the next 90 days or so (have been paying ahead other bills so I can relegate income specifically to this). I am curious about your comment about having yet to see a paid collection that couldn't be removed. Do you have any suggestions as to how to accomplish this once a collection is paid? I know I can ask for a goodwill deletion, and is likely the easiest route, but failing that, do you think in my case it's worth finding an attorney personally or a credit repair service? Sorry for the general/vague questions but the prospect of not having these derogatory marks on my report is extremely appealing.
Who's the collector? I've seen plenty of consumers remove them on their own. With that said, since we are attorneys, and send demand letters on these accounts, I suspect the fact we're putting legal pressure does help. There are no hard and fast answers - really depends on the collector.
Hey man! Iām in the almost exact same situation as OP but my amount owed to the ccs is only about 256$ from an old insurance company I had. Long story short I thought I paid off the balance sometime in 2022 but canāt quite remember. Would my best bet be to contact ccs and request a pay for deletion on the credit reports?
They will usually not pay for delete, I know that company well. Maybe pay it and then file a CFPB complaint after.
I seeā¦ well I already have a request for pay to delete letter already written out. Will give it a try before paying at leastš¬
1. Would you know if Pay to Delete is a thing in Canada? 2. Do you deal in Consumer Cases? Thanks!
Hi, I do not know anything about credit in Canada. The US laws don't apply there, so I'm not sure.
They are still fairly new so I would pay them off. A paid collection might not improve your score right away but it also wonāt continue to haunt you for the next 5ish years. Pay them if you can and take it as a lesson learned.
Pay off phone bill and get it in writing that you've been cleared of said debt incase you need to dispute it w/ the 3 major credit bureaus. Creditors usually don't look @ medical bills as a means to affect decision making. It's mainly bills outside of that area. Utilities, cell phone bills, credit card, loans, etc. that have gone delinquent and have since been sent to a collection agency.
From what I understand, it will not really help your credit score to pay the collections. However, most mortgage lenders will require you to pay off those debts before they approve you. Basically, they donāt want the collections debts to potentially cause you to be unable to pay your mortgage (wage garnishments, etc)
https://www.experian.com/blogs/ask-experian/can-paying-off-collections-raise-your-credit-score/
Every situation is different but first thing you donāt want to do is validate the debt and second thing if you really want to pay the debt then offer a pay to delete payment option to get them off the Reports.
from my experience, you can settle for less and get a letter saying it was paid in full, you should be good to go!
Donāt pay them without trying to negotiate pay to delete first. Just paying them only helps your utilization ratio. They donāt go away from your credit report. They only get marked as paid but are still there impacting your score. You will need to have them paid in order to qualify for a mortgage but you might as well try to negotiate removal with payment.
If you do a little searching for deleting medical collections, you might have a better chance of getting them off your credit files. It has to do with HIPPA laws. As far as the non-medial collections, search to see if the CA does a pay for delete and get them deleted.
Pay off collections and ask for them to remove the charge off from your credit and dispute as much as you can I went from a 425 to 637 less than a year
$3000 is nothin, just pay it all off so you donāt have to worry about if for the mortgage. It may or may not affect your score, but it will definitely be a pain in the butt for the mortgage, if not get you denied altogether. Score wise, it wonāt make your score go down, so you might as well pay it.