I have a 6 year old dept to a collection agency. if i pay it off, will it erase my bad credit? Any advice?
Kind of hard to answer this one because you did not specify what type of debt it is. If it is just for some credit card debt or a small loan, then let it drop from your report.
Paying it off will increase your credit score a little but it will go from a derogatory to a potentially negative entry on your credit report. If it is a large amount, might as well wait it out.
Here are the time frames for reporting collections
Unpaid Tax Lien – Indefinitely
Chapter 7 Bankruptcies – 10 years from date filed.
Public Records – 7 years from the date of payment;
Closed or Inactive Accounts – 10 years from the date of last activity;
Derogatory Accounts – 7 1/2 years from the date of original delinquency;
Once it has been removed, still keep an eye on your credit report, there are many collection agencies that will re-date the debt to place it on your credit report even though this practice is illegal as per 15USC1681s-2] § 623. Responsibilities of furnishers of information to consumer reporting agencies.
Some bottom feeding agencies hope most people don’t know the rules under the FCRA and the FDCPA
Hope this answers your question
LEGAL DISCLAIMER: The advice contained herein is for informational purposes only. It is not to be construed as Legal Counsel nor Legal Advice.
March, 21st 2010 at 3:10 am
No it will not erase it but after you pay it off it will eventually be removed from your credit report. You will then have to show a history of good credit for probably at least a year before your credit score starts going up.
P.S. Previous answer is Spam.
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March, 21st 2010 at 3:45 am
The item will fall off your credit report anyway in one year as seven years is the maximum allowable time for defaulted debt to say on your credit file. Even if you did pay this off, it would still remain on your credit file as a "paid" collection account…which is still bad….My advise: just sit back and let it fall off naturally due to the 7-year rule.
The only reason you might want to pay this is if you are shopping for a mortgage….Mortgage agents insist on seeing collection accounts paid off.
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March, 21st 2010 at 4:19 am
Never ever pay a collection agency.
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March, 21st 2010 at 4:38 am
Kind of hard to answer this one because you did not specify what type of debt it is. If it is just for some credit card debt or a small loan, then let it drop from your report.
Paying it off will increase your credit score a little but it will go from a derogatory to a potentially negative entry on your credit report. If it is a large amount, might as well wait it out.
Here are the time frames for reporting collections
Unpaid Tax Lien – Indefinitely
Chapter 7 Bankruptcies – 10 years from date filed.
Public Records – 7 years from the date of payment;
Closed or Inactive Accounts – 10 years from the date of last activity;
Derogatory Accounts – 7 1/2 years from the date of original delinquency;
Once it has been removed, still keep an eye on your credit report, there are many collection agencies that will re-date the debt to place it on your credit report even though this practice is illegal as per 15USC1681s-2] § 623. Responsibilities of furnishers of information to consumer reporting agencies.
Some bottom feeding agencies hope most people don’t know the rules under the FCRA and the FDCPA
Hope this answers your question
LEGAL DISCLAIMER: The advice contained herein is for informational purposes only. It is not to be construed as Legal Counsel nor Legal Advice.
References :
http://www.access.gpo.gov/uscode/title15/chapter41_subchapteriii_.html
http://www.ftc.gov/bcp/conline/pubs/alerts/timebaralrt.pdf
March, 21st 2010 at 5:18 am
If the collection agency is harassing you then you can pay it off. Paying off will help increasing your credit score. And if not then you can wait for one more year and it will get out of credit report. Because any debts remains on your credit report not more than 7 year.
If you want to pay it and you are not able to manage the debts you can go for any debt consolidation program. Here is the source of a debt consolidation company named http://ezconsolidation.com for your reference.
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March, 21st 2010 at 5:43 am
You can use credit repair agency to fix your credit – for example this one – http://freecreditreport.deep-ice.com – They can clean lots of bad stuff from your credit report – and do it much faster than yourself, so your credit will go up fast.
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