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drkatie

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Large debt in collections with up to date monthly payments; any affect on credit score?
I have a large student loan in collections that I cannot afford to payoff in a lump sum even if they offered a lower settlement unless it was MUCH lower than original amount. So, now I am out of training and in my "career" job and able to afford monthly payments which I am up to date over the last several months since I started paying and am not worried about getting behind again. Does my repayment status or anything positive get reported to credit bureaus? Or does the 7 years it will remain on my credit score get continually renewed with each payment. This is a loan that could take many years to pay off and I'm worried doing the responsible thing and paying it off has the potential to damage my credit score far longer than not paying would. Also, I believe original creditor may still own it. After paying on time for so long, does it revert back to them or anything like that? Does anyone have a similar experience, and if so what course of action would you recommend?

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Paid or paying on a collection account has very little scoring effects as vast majority of scoring models do not differentiate between paid and unpaid collections. However paid collection would reflect favorably to most potential lenders whom looking into your credit profile... The removal date doesn't change with any future payments, what it might change/restart is the Statute Of Limitations of you being sued for that debt, if you decide to stop paying on it later, when/if you had entered a firm repayment plan, it can be consider as brand new contract.

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