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I will need a loan soon, and I have a collection that is negatively affecting my score
My debt from the collection is listed at approximately $7500. The debt was from a business line of credit from a now defunct company I operated. I was personal guarantor for the debt, so I don't believe I can fight the debt. However, the debt (orig. Wells Fargo, approx $3500) was charged off and sold to a collection agency (CACH, LLC *groan*). I have read elsewhere and some on this site that paying off this type of debt may not have any affect whatsoever on my credit score. Any advice on how to deal with this situation? I am not looking to avoid the debt, but the collectors have shown no desire whatsoever to negotiate either a settlement or a payment plan - an all or nothing sort of thing - and I have been trying with them for over two years.

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Before you pay off any of your collectons or bad debt...negotiate! Try to get the creditors to agree to delete your collections for payment. The person you call at the collection companies do not have a lot of power so it would probably be best to ask for a supervisor. Remember to be polite and keep in mind these people are in business to make money. The way it works is they buy uncollected debts from companies for pennies on the dollar. If you pay them and they do not change your status, you will just have 7 years of paid in full bad accounts on your credit reports. You want a complete deletion or pays as agrees status next to your accounts. Try to get the payment reduced first but if they will only agree to delete for full payment. Pay them BUT MAKE SURE YOU GET A PAYMENT FOR DELETION LETTER FIRST! GET IT IN WRITING FIRST! Having credit cards isn't a bad thing! Credit cards don't hurt your credit scores. Usage of the credit card does! In order to get a good credit score you have to have a good credit mix. Revolving credit (credit cards), installment credit (personal loans, car loans, mortgages, student loans). An example of a good credit mix would be:  2 credit cards, 1 mortagage and 1 car loan. Bottom line...negotiate your bad debt before you agree to pay anything. I hope this helps. Also google how credit works to get a better understanding of credit. Also go to link below to better understand how credit works. 

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