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rebuildcredit799

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$5400 in 20 different collections accounts. Best place to start?
Just as the title says. I want to make all this better. I can pay them off but if they're gonna stay on my report then is it worth it? Does negotiating work?

I want them removed as soon as possible. They range from $20 to $1400. Some random copays and then 2 closed store credit cards.

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What's is the Statute Of Limitations in your State or where the debt occurred? If they still with-in the SOL, by paying them "might" stop them from taking further actions.

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If you wish to pay the medical collections? Try ask the original creditors first, if they are willing to recall the collections, and you pay them directly, also research the "HIPPA" and "whychat" processes

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Of course there is the "pay for delete" deal, to get it writing from collection agencies that once you pay it, they will remove it. The chance of that happen is extremely very low and it might be blocked by credit bureaus as it might going against their agreements and or its not in accordance with FCRA.

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Reply by
JohnnyRain127

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Helpful to 2 out of 2 people

Nothing restarts the reportable/removal date of collection accounts, not by simply contact collection agencies nor by paying collections... What might restart is the Statute Of Limitations, the length of time creditor can bring a lawsuit against debtor, that's "if" debtor take full ownership of the debt or worse, entering an firm repayment agreement in writing and stop paying it later, as it can be deemed as new contract/promissory note, consulting a Attorney should always advised in those cases.

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Per FCRA, the reportable/removal date for collection accounts is 7 year plus 180 days from Date Of First Delinquency. Generally it's when last time you didn't pay that lead up to charge-off/collections. It doesn't go by any other date.

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Everyone should verify what I said independently, read up on FCRA regarding reporting procedures, pay particular attention to section 605 (a-4)/(c-1), FDCPA and your State's collection laws. Or better yet, call up Credit Bureaus and ask them directly, what date do them go by, exactly when the collections will be removed, and if anything can trigger the clock to restart.

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It can't hurt to pay them off, except in your pocketbook. I can tell you that although most creditors aren't using FICO 9 yet, this latest credit scoring model doesn't penalize you for paid collections. A lot can happen in 7 years... In four or five will many more creditors be using this latest version? Who knows, but if the answer is yes you'll be so glad you paid them off.
Sometimes what is in the report is more important than the score itself. Housing is hard to come by with open collections on your report, whether you are just renting or trying to buy. 

For some of the larger collections, I would definitely try to negotiate a lower payoff amount. Most collectors will reduce the amount owed if you can pay it now. It will show up as a paid collection (which is the important part), and in the remarks it will say something along the lines of "Paid in settlement for less than full amount."

JohnnyRain127's advice about the medical debt is excellent, btw. Sometimes their collection agencies work on contingency, which means the debt isn't sold to them; the two entities are working together to get you to pay. If you pay the original creditor (and this is often true with smaller creditors like utilities, cell phone providers, etc) sometimes it will be removed from collections entirely. Doesn't hurt to contact the original creditor and find out.

One final caveat: They WILL still be on your report for the full 7.5 years beyond the date of original delinquency, even if you pay them. Pay for delete isn't likely to happen since it goes against the agreement between the collections agency and the bureaus. Your score may not improve much if you pay them. It will reduce your total debt though, since collections accounts are factored into that figure. 

Best of luck!

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You have some work ahead of you.

First: NEVER contact the collectin agencies directly until you are ready to settle. If you do it will "Reset" the collections clock. Accounts stay on your report for 7 years from the "Date of last contact" so if you contact them today, it will be there 7 years from now.

Second: Write a "Validation Letter" (Google it for a template and more info) for each collection on your report.  These are mailed to one of the Credit Bureaus that is reporting the collection.  This letter requires the collectors to verify that they have all the legal paperwork to collect the account.  In many cases they don't and they will have to delete the account.  This usually takes 30 days.  This can work to remove as many as 75% of the collection accounts from your report. 

Third: on the accounts that are verified, You'll then do an  "Offer and compromise"  and/or "Pay to delete"  Google these so you understand how they work.  You will basicly offer to pay a percentage of the account balance in a lump sum if they will remove the negitive collection account from your report.  This is done in writing only, can not be done on the phone.  Address all letters to collction agencies "ATTN: Collections manger" (the only one that can authorize negotiations) Mail them "Return receipt requested", Its all about the paper trail, That way they can't say they never recieved it.  By putting these things in wirting, it will require that they respond within 30 days as well. 

It seems like a long row to ***, But it can be done.  diligence is the key, your credit score is the most important number in your financial life, one that follws you forever.  It affects not only the interest rates and terms that you get on credit cards and loans, but things like the rate you are chartged for insurance and could effect weather you get a job or not.

hope this helps

Good Luck

Top Contributor
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Contacting the collection agency does NOT restart the seven year reporting time. The seven years does not begin from the "date of last contact". You need to do some reading on this so you are not giving out incorrect information.

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