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Krystal1052

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Is it beneficial to eliminate collection accounts with opening a new loan?
Currently I have two collection accounts open, one with around $9,400 and another around $700. I wanted to see how my score would be impacted if I paid these both off with a settlement agreement down to a zero balance. I wanted to do this by taking out a personal loan (unsecured or secured) of about $5,500. Will this increase my score and if so, by about how much? And then also even though these collection accounts would be paid, how much longer will they remain on my credit with a negative impact? Also, does it matter if I would do a secured vs unsecured loan in regards to the credit impact?
Currently my scores are showing to be 626 and 640.

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With two collection accounts on record, you are not likely to get a loan.  The primary purpose of Credit Karma is to teach people how credit works and how to build a good credit score, which they do very well.  You need to take the time to read the articles here, learn about the statute of limitations on collections and how to negotiate a 'pay for delete' agreement.  This is knowledge that can benefit you for the rest of your life.  I now have a very good credit score because of what I learned here.

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If you have an open collection for $9400, this is going to be a tough road to get any type of loan, although, good luck in your search.  If you negotiate a pay for delete with this one, you will want to ensure the deal comes with a payment plan if necessary.  Don't promise anything you can't deliver.  If they agree and you don't meet the negotiate, it will not go away.   If you aren't successful in your bid for a loan to pay it off, at least begin the process of paying it off as quickly as possible.  The effects of a collection remains on your credit report for 7 years.    During your negotiation, it would be helpful to know the statute of limitations for you state.  If you are beyond this date, they can't legally collect and they should know this during your negotiation.  Although, remember, in a negotiation, both sides must feel that they won so don't try to railroad or strong arm them. 

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