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Question By
itsyorkie

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0 People Helped
If I pay off a collection account will my credit score improve?

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In an attempt to raise my credit score I got a copy of  all of my credit reports and paid off all of my collection accounts within a month. There was like 6 of them. After a month they were all reported to the bureaus as "Paid" or having a Zero balance but they are still under the "Potentially Negative" catagory on my report. My score did not change one bit even though I technically owe nothing to creditors. I am beyond annoyed by this. Now I am starting to hear from people, including financial advisors, that it is better to just leave them be and not pay them. Once they reach collection status they will be negative no matter if you pay them or not. And if you DO pay them, like I did, you reopen the account so it stays on your report for seven years from the day they are paid rather than 7 years from when they were first reported. So i screwed myself by doing the right thing.

 I was advised to open a secured credit card, which I have done through Capital One, and my score should improve if I keep the balance below 30% of my limit.

It's a shady world out there people. Good Luck!

Reply by
lizzy525

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250 People Helped
Helpful to 249 out of 267 people

I gota tell ya it's tricky with collections.  I however, did not have the money to pay my collections on my credit  report and had to let them run their course so to speak.  Well, I am here to tell you that when anyone tells you that you should let them ride their course,  DO IT.  I tried what you did several years ago with the same results.  So here is the crux of the matter:  I found that paying them off makes your credit   WORSE.    Leaving them ride out the seven years makes your credit BETTER.  I too have just got a secured cc and I have had it for 3 months.  I had checked my score on here about a month ago and there was no change.  Today it has increased by about 100 points.  So ty secured cc for making my credit better and I hope this helps you

Reply by
barpal

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76 People Helped
Helpful to 75 out of 84 people

That was always my feelings on collections once it reached the credit bureaus. I always made it a point NOT to pay them when they reached this stage.

You DO, however, still have the chance to pay the balances off when they are IN collections. But, you have to respond quickly before they are sent to the credit reporting agencies/bureaus. Once there, it's there for good- even if you decide to pay them off at the late stage- in the credit bureau stage. Keep your money.  

Reply by
lucydog777

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10 People Helped
Helpful to 10 out of 13 people

i just had three removed this month!when i paid them i ask them to remove them and one i disputed that it was satified and ask experian to remove it and they did.

Reply by
CleetusTheFetus

1 Contribution
0 People Helped

NEVER leave a collections bill unpaid. It will consistantly ravage your credit score if you do that. They no longer EFFECT your credit if they are paid. If they remain UNPAID thats another story. I dropped NINTY ****ING POINTS because of bills I didn't even KNOW were there.

Reply by
viv630

3 Contributions
2 People Helped
Helpful to 1 out of 1 people

Did the same tbing, paid in full four accounts incollections. One was taken off completely, to my surprise, but the other three are still showing on my report. Although I paid these accounts off my score didnt go up. 

What a cruel world ; (

Reply by
1CutiePie3

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1 Person Helped
Helpful to 1 out of 1 people

Thank you so very much for sharing this information with us!  I'm in the same position, with the initial intent to pay all my collections accounts.  I came to this section to read about anyone else who had been in the same situation as me, and your story was exactly what I needed to hear.  Thanks so much!

Top Contributor

Reply by
TaylorP61

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Helpful to 1 out of 1 people

yes-  you Screwed yourself,.... If I am Correct in reading the Many Comments on CreditKarma,... You must DEMAND the ITEMS BE REMOVED all together from the REPORTS of all Credit reporting Agencies prior to Sending in ONE Negotiated Payment.  So, by Not DEMANDING IN Writing and, recieving a reply to yourself  in Writing that they will , infact, remove the items,... YES, YOU SCREWED YOURSELF by allowing a Payment and renewal of the Collection cycle.   :(

Reply by
zobma

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1 Person Helped
Helpful to 1 out of 1 people

This is one part of the credit system that is really stupid.  I mean that literally, not just as a pejorative.

The collection agencies often hound debtors for small amounts... $75, $150, and a small amount counts against you just as much as a collection account of several thousands of dollars would.  What is not very smart in the system is that there is absolutely no incentive for debtors to pay those collection accounts.  They might get marked "paid" but stay on the credit report until the 7 years is up.  Just as they will stay on the credit report if ignored and left unpaid.  The debtor is better off keeping the money in his pocket.  It's a dumb system.

I can only speak hypothetically,  but I know if I had collection accounts and they were removed from my credit reports automatically within say, 3 months of their being paid in full, I would pay off everything I could immediately.  Everybody would win.  I would get my credit report cleaned up and the collection agency would get their money.  As it is, everybody loses.  Why should any one pay a collection account when it will stay on their record for 7 years anyway? 

Carrots work better than sticks.  Always have, always will. I just don't see the point, other than pure evil, of a collection company refusing to agree to remove the derrogatory account from a credit report knowing that they could get their money by doing so. 

*shaking my head*

Reply by
nubbie21

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0 People Helped

I'm going through this now. Just settled 2 accounts and the derogatory remarks were removed from my credit report, however, my score has not moved! I hope I didn't waste my money if my score will not go up. 

1 Contribution
1 Person Helped

Paying off debt collections

Helpful to 1 out of 1 people

I was wondering, I have collections that show on Equifax that doesn't show on transunion, is there somehow someway where I can dispute that & take it off Equifax!? Also wanted to know if I call the collections agency & ask them if I pay the debt off to take it off my credit report how can o be sure they would follow through on their word

1 Contribution
1 Person Helped

Question

Helpful to 1 out of 1 people

Do you send the letter before or after the balance is paid off ?

1 Contribution
32 People Helped

Haven't tried it yet

Helpful to 32 out of 34 people

I found this pay for deletion sample letter http://www.credityoda.com/pay-for-delete-letter.html. I have not tried it yet but it looks good.

Reply by
Esomirp7

4 Contributions
11 People Helped
Helpful to 6 out of 7 people

I'm using it now. Will be mailing letters tommorow and will update any responses I get. Thanks!

Top Contributor
11 Contributions
103 People Helped

Helpful to 75 out of 85 people

Yes your score will improve once it's paid off. Make sure you ask for pay to delete option. It is always good to negotiate the amount with them and ask for paid in full letter as a proof that it has been paid in full. 1 collection account will increase up too 30 points on your credit report. It takes almost 30 days to update. If you settle the amount less then what you owed it will still impact on your report as negative. You can always dispute the amount with credit agency and have them update the record with in 30 days. Hope it helps. 

Reply by
lmj1968

5 Contributions
38 People Helped
Helpful to 17 out of 26 people

I paid off some old medical bills which were in collections last year. My credit report (Equifax) shows them as having a 0 balance/paid, but they are still having a negative impact on my credit. I didn't know I should have a letter from the collection agency for my protection at the time....how can I get this to stop negatively impacting my credit??

1 Contribution
2 People Helped

I owe only $85

Helpful to 2 out of 2 people

it has been i colections for about a year or two i have a crdit crd got aproved for a loan and many other things i payed my cridit cards good i paid my loan off...and now i see this its not that far away to go to the collection place. if i go there and pay them in cash in full there stupid $85 can i get a statment from there end saying that the accounts been payed in full..Btw they have yet to contact me in any way.by mail nor by phone.

1 Contribution
7 People Helped

asking for debt to be removed

Helpful to 7 out of 8 people

I had an open collection account that was on my report. This is how I handled getting it removed.

I never admitted to the debt and asked that the collection company to stop calling my job. They continued calling so I put in a formal complaint to the Consumer Financial Protection Bureau via their website. They in turn sent the complaint to the collection company, which had to respond within 15 days. In the response from the collection company, it stated they wanted to be in complaince and agreed to totally remove from all 3 agencies once payment was made. Before I sent payment, i emailed the collection company with an attachment of their response to my complaint, and asked for their agreement to remove to be put on their letterhead. Within 7 days, I received that letter. I called, made full payment of $175.00 and in 2 weeks it was removed from my credit. Score jumped 28 points. 

Reply by
horsejumper23

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1 Person Helped
Helpful to 1 out of 1 people

Enter Your ReplyWhat did your complaint to the consumer financial protection bureau include?

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1 Person Helped

Collection Notices by Mail

Helpful to 1 out of 1 people

Im trying to get my credit fixed up as well as everyone else. I recieve collections notices by mail, but they are not on my credit report. They are for ie: old utility bill or something I ordered. Do those effect you when trying to buy a home or car? I do have one cable bill on my credit report thats been there since 2011, do I ride it out or do I try and settle? The debt is $285. Do I try them with a 1/4, 1/3, 1/2? Everything else on my credit report shows me having excellent payment history the last 4 years. I feel this could hold me back. Thank you in advance!!

1 Contribution
12 People Helped

what if the creditor refuses to send.

Helpful to 12 out of 15 people

the collections agency said they do not handle credit information that we would have to talk to the original creditor... we talk to the original creditor and  they refused  to send a letter of promise. i was told that they cant send thing of sutch a nature and that once the account has been paid they send a letter of a 0 balance. my question is how can i get them to send a letter promising before i make a payment? or would it be better to wait for that letter and if they dont send it after 30 days dispute it?

3 Contributions
17 People Helped

removing collection items

Helpful to 1 out of 1 people

I am trying to settle up my credit score and rebuild some credit. We recently had a positive change in circumstance and while I do not need anything other than a bank account, score is very poor, I have dealt only with cash for 14 years while I fixed and waited out certain debts. 2 remain from 2012 medical bills and the bank will not give me a checking account until they are removed. I have no other anything on my report.  I have no problem paying them, they total less than $800. The lesser one, under 300 I called and they agreed to remove it when they receive payment, but said it could take 30-90 days, is there anyway to force this issue to go faster?  If I dispute the second one, which I have no idea of the date of services, do I put that I do not recognize this bill or what? And is that faster way to remove than paying them off?

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