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Question By
itsyorkie

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If I pay off a collection account will my credit score improve?
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The problem is getting the collection agency to submit a letter on company letterhead that the debt is paid in full and all obligations have been met. Then the next problem is getting the reporting agencies - Equifax, Experian and TransUnion - to remove it from your records. The last two are more agreeable to making changes, but Equifax starts with the premise that "civilians" are liars. They only accept creditor documents to remove something from your records, though they will allow a consumer statement to explain your position. (Yeah, that will do a lot.)

Reply by
Tashinawin

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Helpful to 51 out of 57 people

Unfortunately, I'd have to agree that Equifax is a hard case.  I had a situation where I had a missed CC payment.  It was turned over to collections. The bank that originally sent it to collections got bought out by a larger bank.   In the mean time, I had paid off the debt.  However, the original bank turned over records to the larger bank showing that I still owed the debt.  This happened two more times within the space of 2 years while I was trying to correct the problem with the credit reporting agencies.  Each bank reported it as a delinquent account that had been turned over to collections.  And each time one bank took over the other, they closed that account and opened a new one under the new bank's name.  This had the effect of "restarting" the 7 year period that negative reports stay on your credit report.

I sent countless copies of the statements, receipts, bills, etc. to each new bank and filed a report with the credit bureaus.  The credit reporting bureaus then had to "verify" the information with the previous bank which was no longer in existence.   So the Catch-22 continued indefinitely until one bank held on to the account for a few years and it finally disappeared.

Reply by
jesse3445

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Helpful to 33 out of 36 people

If the bank was no longer in existance, They couldnt verify, and ANY info they cant verify gets the AXE. Those should be deleted

Reply by
briankeys

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Whoa, that is harsh. Sorry about that experience :(

Reply by
justd80010

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Helpful to 1 out of 1 people

I haven't had ANY negative experience with the credit agencies and I've disputed my report 4 times since Nov.2011 and today. As for the collection agencies when I paid them I had a letter stating they would accept a payment of "x" dollars as payment in full and agree to mark the record as "paid in full," I paid with a check or CC so I have a record of the exact payment for "x" amount. I put the letter with proof of payment and submitted it as a dispute and the agencies updated the accounts accordingly all within 30 days. Equifax is the easiest to deal with because a lot of stuff reported on TransUnion and Experian weren't even reported on Equifax, and Equifax showed items "paid" that weren't actually paid. I even attempted to use my Equifax report to dispute the other two unsuccessfully. 

Bashing the agencies isn't helpful. Especially if you know your credit is jacked up by your own hand (and not identity theft for instance). They've all responded in a timely and fair fashion. That's been my experience. 

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1 Person Helped

my situation is unique, please read

Helpful to 1 out of 1 people

my collections issue is with an electric bill. I didnt know it existed because i vacated the residence and my brother assumed the residence with the landlords permission. I tried to help my brother by leaving electric in my name. anyways the short of it is that i didnt know it even existed until i got onto credit karma. ( thank goodness for you guys) anyways, Ive contacted the collections agency (YEAH, YOU READ THAT RIGHT, I CALLED THEM)  i mailed a partial payment. the current balance doesnt reflect my payment. it was 1338, i paid 100. it is showing a balance of 614. they dont ever call me or contact me by mail. im SURE, due to my rare last name, that they could easily find me if they wanted to and fill my mailbox with harassing letters but they dont.... I wanna clear my conscience and get this off my credit report as i see it there every month. I'll deal with my brother and the balance he owes me later but seriously, what should I do about this.... the water is so murky with choices regarding what i should do...

5 Contributions
49 People Helped

Helpful to 49 out of 53 people

YES YOUR SCORE WILL INCREASE IF YOU HAVE THE COLLECTION AGENCY AGREE IN WRITING THAT THEY WILL DELETE THE INFOMATION FROM YOUR CREDIT REPORT.A "PAID COLLECTION" REMAKE IN YOUR CREDIT REPORT STATEMENT CAN SOMETIMES STILL BE A NEGATIVE.

Reply by
waylonwilliams

1 Contribution
40 People Helped
Helpful to 40 out of 43 people

this is correct. i paid off several collection accounts and failed to get them to agree to delete the info. i disputed and only one of them deleted the info. it still showes negative. how ever my score has increased 40 points since, about three months ago

Reply by
Kfarrington05

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Helpful to 1 out of 2 people

Would you write a letter and have them sign it to remove the collection? How can you really go about getting everything clear?

Reply by
justd80010

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Helpful to 0 out of 1 people

This is worth a shot, I tried it. I've never written so many letters in my life. But not a single collection agency agreed to delete the debt but one, NCO. All the others agreed to settle and mark the account "paid in full." 

Reply by
Only1Ghiwawa

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Helpful to 16 out of 18 people

Agree with this statement as well along with the keywords "in writing"...that's the only thing I see that can save your rep and maintain your score or help improve it...good info..thank you..

Top Contributor

Reply by
pitsy088

21 Contributions
110 People Helped

That is so unfair, if your going to pay back an old debt, it should be a positive.  But everytime I made a payment to a collection they turned in the payment but it shows up as a negative on the original debt.  I did not know that.  Everyone should read everything to educate themselves about credit repair.  Because as we who are building know,  even a few points the wrong way are So Dissapointing.  Thanks for all the great advice guys!!!

Reply by
Diligence101

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Helpful to 2 out of 2 people

I've had 6 collections removed from my credit report simply by contacting the collection agency, negotiating a payoff balance, getting a signed letter stating that they will completely delete tradeline from all three credit reporting agencies.  The collection agency may say no at first but you just have to be persistent. Don't settle for no from an "account specialist" etc..I've writtent to the president/VP of some of these companies to get a response. Explain that you are trying hard to make good on your debts. That you are trying to rebuild your credit. Show them you are willing to work with them if they will work with you. Explain that it is not worthy to pay off a collection and have it remain on your credit because a zero balance and an unpaid balance do the same damage on your report. It is just the fact that it is a collection that does the damage. To improve you score, it must be removed completely. There are form letters that you can fill out and send to the collection agency as an offer for "pay to delete" deals. You must be persistent. Don't give up. I have one left that refuses to work with me. I email them and fax them my offer every day. I'm at 30 days straight now. I will keep doing it until they get tired of seeing the offers. I keep a record of every one that I send. I just wrote the President of the company and hope that he will see the sense in making a fair trade. Diligence is key!

1 Contribution
2 People Helped

Collection Agency Won't Delete Info.

Helpful to 2 out of 2 people

I've contacted collection agencies that I owe to get them to send me confirmation in writing that the negative info. will be removed from my credit report upon receipt of full payment. They all say that they can't do this. What do I do? Should I just pay them anyway? I'm really trying to improve my credit. All of my accounts are no more than 3 years old.  Thanks in advance.

1 Contribution
1 Person Helped

Fixing Collections that are not mine.

Helpful to 1 out of 1 people

I have a very odd situation that i dont know how to fix.. I had an account with Duke energy and lived with my girlfriend but we broke up and she moved into a new place as did I but the bill was currently still in my name AT HER NEW ADDRESS. We then transfered it to her name and i thought everything was ok. Well come to find out i have a payment in collections a year later with an account that was supposed to be transfered to her personal info and at an address that i wasn't living at with power i wasn't using. If i get a written letter and signature from my ex stating i was not living there at the time and she takes full responsibilty as well as a copy of her lease showing i wasn't on it can i get this collections to go away?? I don't even have access to the Duke Energy account so how could i even pay it off anyways?!?!?!?!?

Top Contributor
23 Contributions
34 People Helped

Helpful to 7 out of 10 people

Positive Credit or lack of positive credit has as much or more impact on a credit score. Now that point deduction technology is finally available to consumers we are able to increase and maintain our credit scores in a short period of time.

Point Deduction Technology is a software program designed to analyze your credit data. Credit scores range from 350 to 850 leaving the possibility of capturing up to 500 points.

The software recognizes many factors used in credit scoring and assigns a point deduction number per item on a credit report. The assigned numbers will range from 0 to 100+ depending on the type of accounts reported.

The analysis separates the short term and long term point deductions, posting recommendations to recover the necessary points to increase a credit score.

www,ScoreNavigator.com analyzes a borrower's total credit picture based on the data reported by the bureaus. The combination of a borrower's total credit picture as well as each individual item are factors in determining the score impact of each individual item on a report. ScoreNavigator determines with 92% accuracy the point impact of each trade line on a credit report, whether positive or negative.

Reply by
cerich

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Helpful to 1 out of 1 people

Thank you sheepdog. I am going to look into this right now.

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17 People Helped

Helpful to 16 out of 16 people

I had a old medical bill that was turned over for collection. It was 250.00 . It shows up as 4 or 5 different billings on credit report. It has been paid off for months and still reflects on my credit as 4 bad debts. The companies and /or bureaus refuse to remedy the report. I'd say that whether ya pay or don't pay makes them no difference. Not fair , but true.

Reply by
moakes

7 Contributions
3 People Helped
Helpful to 3 out of 5 people

I am assuming you sent a check to the collection agency. If so, why don't you fax a copy of the cashed check and/or bank records to the credit bureaus?

Reply by
zumbafan

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medical bills stay on collection agency reports for seven years

Reply by
gnilbeforeme

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Helpful to 13 out of 16 people

I had a similar problem where the same account was showing multiple times.  I called up the credit bureau and asked them why 3 or 4 hits were there for it rather than just 1.  They said it should only be the original account's and the current loan holder's.  They then sent a dispute to both the collection agencies to insure that only the current one was marking the account.

Reply by
amoura1997

1 Contribution
4 People Helped
Helpful to 4 out of 5 people

I t should show paid at least. I would dispute it with the credit bureaus and let them resolve it.

Reply by
Taraswank

2 Contributions
0 People Helped

so even if you pay it off and ask them to remove it it will still be there?  I was told by someone from expeiran that if i would pay off my hospital bills that went to collections, it would drop my credit score by 30 points then every year after on the payment date my score would drop a little more. Is there any way around this?

Reply by
chula95

2 Contributions
0 People Helped

i am agree with you i paid all my collection account.  i just get my credit report and they all show paid collection i call Expedia they said still there until the date collection account was open i dont get it the main reason you paying is to be under a good standing and STOP PEOPLE calling you to paid in full. :(

Reply by
justd80010

5 Contributions
2 People Helped

If the account is close to the drop-dead date then there is probably no reason to pay it as it will remain on your report as "paid collection" anyway. Just let the account drop dead and then dispute it. However if the account is fairly recent and is going to be on your account for some number of years then it is best to first dispute it, it may drop just from this, if is doesn't then write the collection agency and offer to pay them 50% in exchange for them deleting the record (there are sample letters demonstrating how best to compose such letters). If they don't respond or respond negatively then write them another letter demanding they validate the debt (again, use examples found on the Internet). In the end if they still do not delete the account then pay it. 

The "paid collections" you can have removed after the drop dead date as well, the difference hear is that it looks better to make a good faith attempt to pay your debts than to not. So it just depends on your situation and how long you think you can go until the negative marks on your account drop off. 

Reply by
bhuff85

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Helpful to 3 out of 6 people

There is your problem - you called an online travel agency rather than Experian.

Reply by
Taraswank

2 Contributions
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Lol no i didn't i just spelled it wrong.

1 Contribution
9 People Helped

Helpful to 9 out of 10 people

I contacted a company that I had two months worth of collection history and they stated they were sending a letter to me and to the three credit agencies to have it removed. Will that increase my credit score a lot or a little?

Reply by
bucher5

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Helpful to 9 out of 10 people

it depends on what they send. if you payed a settlement amount it could show on your report different ways.  i have one that shows "bad debt" even though it has a zero balance.  They offered me the settlement amount they should be satisfied with the debt but it doesn't always work that way.  another one shows account closed and balance zero but states paid less than original balance. 

Reply by
Tashinawin

8 Contributions
139 People Helped
Helpful to 8 out of 8 people

 My understanding is that it will always show "0" balance if you took a charge off (settlement for less than the original amount) and it was reported to your credit report companies.

However, that does not mean that it won't have a negative effect on your credit score.  

I believe it still shows the amount owed if it goes into collections and is not resolved with the original company or the collections agency does not report your repayment correctly.

Reply by
justd80010

5 Contributions
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Helpful to 0 out of 2 people

If you pay an account and it says something like that you can make a comment on your reports telling what happened for potential creditors to consider your side when making their decision. 

1 Contribution
2 People Helped

Helpful to 2 out of 2 people

 i have a collection on my report for 70.00 dollars from a medical bill, i want to pay it off but i think if did i wpuld drop my already poor score of 610 what should i do i am trying to improve my score to get a house

4 Contributions
7 People Helped

Helpful to 3 out of 4 people

Yes, mine went up 50 points when my collections were disputed.

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