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Ratehs

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Paying off collections, is it the number of accounts you pay off or the $ that counts?
I have 10 collection accounts. Six of them are small and total all together to $569. The rest are $200 to $1,200. My question is, would it be better to pay off the larger account and thus pay off more money but only one account. Or would it reflect better on my score to pay off the six smaller accounts and thus reflect having paid of 6 but not as much money. I do not have any money to pay off both. Additionally, if I were to open a credit card would that negatively effect my account more than paying off collections would positively effect it? With a credit card I could pay off all accounts.

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That's actually kind of a tough one. The first collection will cause roughly a 50 point drop in your score. Each subsequent collection is worth about 15 points. I know unpaid collection amounts are factored into your total debt, but I don't know how much having an extra $1200 or so in debt affects your score. I would tend to want to pay that one off simply because that's the one most likely to result in a civil suit, and that is a pain in the neck you definitely don't want.  Most creditors won't go to the trouble and expense to sue you for a tiny amount. 

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Collections are collections regardless of the amounts and you are not penalized more or less per collection depending on the amounts. I would make it my goal to eliminate as many collections as possible, so tackle the small ones first. Do some reading on "pay for delete agreements" and understand that simply paying collections does little to help your credit, you want collections accounts REMOVED instead of just marked as "paid". If you have that many collection accounts you are NOT going to get a decent credit card that would have a line high enough to pay your debts. Do some reading on "pay for delete agreements" "7 year credit reporting times" "statute of limitations" and all other credit related topics. It is always wise to do the reading first, before taking any action with your credit.

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Keep in mind: If a negative account is getting close to falling off your reports for the 7 year rule, sometimes it is best to leave it alone. Find out if you can still be sued for a debt by looking up your state's "statute of limitations" to be sued for that debt. Be careful communicating with debt collectors. Do not enter any payment agreements with debt collectors as it can reset the "statute of limitations" (the seven year credit reporting time period CANNOT be reset though).

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Interesting that there is not a single article on "pay for delete" agreements on Credit Karma. Probably because it's not a legitimate practice and therefore it doesn't happen most of the time.
Credit bureaus are in business because they are providing a service to creditors. When a creditor purchases credit reports they are expecting reliable, relevant, HONEST information from the bureaus. If bureaus allow creditors to tamper with a person's record, their credibility is severely compromised. The fact that a collection has been paid isn't as relevant as the fact that it happened in the first place, according to Fair Isaac. That's why pay for delete is a violation of the service agreement between a collection agency and the bureaus. It is sometimes done, but making a habit of this practice is risky for collectors so they don't do it often. 

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I agree that "pay for delete agreements" are not easy to obtain and do not happen all of the time, but you must realize something, this is the real world, money above all. Debt collectors are in the business of collecting money and they will often do whatever it takes to collect money, that is their sole purpose. Debt collectors violate laws all of the time, if they get caught and have to pay a fine, it is just a cost of doing business to them. If they get too many violations to ruin them, the answer is simple, close up shop and open under a new name and repeat.

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