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EA23

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Does paying off my collection debt help boost my Credit?

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Yes.  But, since it took a while for it to go to collections (late/missed payments, maybe) it may take a little bit for the score to go up unless you can negotiate a pay for delete agreement.  That topic is covered in the articles here.

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Yes it does..  I had 3 items in collections and finally woke up and paid them off and my credite score has jumped up.  DO NOT deal with them by saying you will take the shoter route in paying them off because it will show that it was not paid in full so pay the full price off without them handing you a deal to pay less.

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BreeziB

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It is in your best interest to, YES ask for a settlement. There is no reason to pay the account balance in full when you know they are willing to settle if for less as the balance includes interest, fees and charges which are way above the amount of debt that was even borrowed.

A few years ago FICO changed its scoring algoritims to show that accounts reported in collection that have been paid in full or settled will be removed from the scoring calculations, no longer negatively impacting your score for years to come. These accounts may still remain on your credit file, unless the creditor agrees to remove them altogether as part of a repayment agreement, but they will no longer count against you in the calculation of your FICO score.

Therefore it would be a waste of your money to pay the account in full balance if they are willing to do a settlement.

*I am an IAPDA Certified Credit Counselor*

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pay off

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 paying off my collection debt. does the 7 year time start over from that date or does it still come off the report from the first time being late

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Negotiations

Your last sentence stated that the topic is covered is covered in the articles here.  Could you direct me to the articles?

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Yes & No

It could help boost your score with time.  Once you payoff a charged off account or an account that is in collection, that start the 7 year period for it to reflect positive information.  So, the main thing that will affect you about that account at this point is the history of the account, which is the negative part, but as time goes and you continue to build good credit it will not affect you as much.  

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Continue

Also, even if you negotiate a settlement or pay it in full, it will still stay on your credit report to reflect positive information.  Most companies start the 7 year period from the last activity date of the account so the sooner you pay it off the less of negative time will affect your CBR, but try to do it before it reports collections on the report. I use to get these calls at lot when i worked in 3rd party collections, once you pay it comes off, THIS IS NOT TRUE, cause it must reflect the positive time.   Its best to read over your contractual agreement to find out when the original credit will put an account in collections or how many days past due due the send it or sell it to a 3rd party agency.  From my experience in banking, most companies sell the debt off once it becomes around 120 days past due, if not that far past due it will only stay at in-house collections.

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