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mommy2grls

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I got a letter from a collection agency for a settlement
I got a letter from a collection agency for a settlement on at debt for 50%. The debt was $1007 and they will settle for $503 how will this affect my credit if I pay it off. It has been in collections for a few years now. Trying to increase my credit score. I only have 30 days t agree to this settlement. Also since it is not over the $600 write off will I have to pay back money come income tax time? Thanks for your help in advance

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How many years has it already been in collections?  Once its hits 7 years, it will come off.  the older the debt the less it will effect your credit.  Unless the collections is willing to delete from your record once you pay, then I wouldnt do it.  If they just update your recored showing paid or settled, then this restarts this account to be reported for the next 7 years on your credit and could effect your your credit and score even longer had you just let it fall of initially. 

As for the taxex.. they should have anything to do with them... in other words, you will not be paying taxes on an old dept even if you paid off the collections today.  

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