Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!


Posted in Credit Scores
Profile Image

Question By

2 Contributions
11 People Helped
What is the best way to handle accounts in collections?
I am slowly rebuilding my credit and I have 3 accounts in collections and I cant find definite information on the best way to handle them. CreditKarma says it has a low impact on my score. But my credit score in a year has only improved by 45 pts. Most of that is because I took out a secured credit card and my on time payments have reflected there. So should I wait for the debt to fall off (in about 1 year and a half) or set up payments? Also if I set up a monthly payment plans, would these accounts upgrade or will they continue to reflect as in collections until I pay them off in full?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

All Responses

Results 1-5 of 29Results per page: 5 | 10 | 25Page 1 of 6   Previous | Next
1 Contribution
83 People Helped

Helpful to 83 out of 93 people

I have learned that depending on when the collections will fall off your report, it is ok to leave it alone and wait. Althought, if you want to buy a house soon like me, and you collections are getting in the way, this is what I am doing. Pay the bill and request a receipt. Or find a way to have proof of payment. Then submit the receipt and a letter requesting for the debt to be removed to all 3 bureaus. To ensure it gets done, send the letter at the same time each month for 3 months. I've done this and it worked in the past. Good Luck

Reply by

1 Contribution
19 People Helped
Helpful to 19 out of 27 people

Who do you send the letter to?

I have 3 collections accounts, that I have been paying on but have recently decided to settle (less than full balance) because my husband and I want to purchase a home. The mortgage guy I spoke with had me under the impression that these 3 accounts are killing my scores, but I've been reading other things about this.


Top Contributor
62 Contributions
226 People Helped

Helpful to 49 out of 59 people

Any collection is going to show as a negative on your report. I am working through the same situation myself. I want to buy a house but I have limited credit history and a low score. I do know it is best to communicate everything in writing verses via phone. There is no paper trail if you negotiate via the phone.  You need to ask for someone with the authority to remove durogitory remarks on your credit first off. Not everyone in a company will have the power to do so. If someone tells you NO they cannot remove a collection or durogatory remark if you agree to pay the balance then ask for a supervisor. Best practice is to send a good will letter and explain your terms to the agency, ie. I will pay off the debt in full in exchange for the removal off my credit report. Most debt is purchased for pennies on the dollar and often times you can even negotiate the amount down too, if you can pay a lump sum. If you can pay through the origional creditor then do so, make sure they agree (in writing to provide you with a copy of reciept of payment or something saying it is paid in full). If you pay the origional creditor the balance make copies of the payment info and send to the three major reporting agencies and they can remove the collection since the debt was paid. I have had luck with disputes that were paid but still showing collections on my report. I removed over 6 last year and all I said was this was paid in full. Transunion took it off no problem. If you are close to a collection dropping off you can let it go. Although I have had several debts sold over and over to different collection agencies when they neared the drop off date, thus creating an all new delinquent account. I have managed to take care of most my issues this way, now the hard part is getting that number back up and taking care of a repo. Best of luck again try doing things via mail or email. If you use mail send things signature required!

Reply by

2 Contributions
34 People Helped
Helpful to 32 out of 41 people

you wouldn't happen to know how to deal with the ones who sell your debt right before they are supposed to drop off, do you? I have a few accounts that should have dropped off but they keep getting sold to other debt collection companies.  I want these items gone for good but don't know where to start.....any help is much appreciated! thanks =)

1 Contribution
33 People Helped

Helpful to 33 out of 42 people

if you have a yr and a half left for them to come off just let them ride out. Once you pay the collection and payment its going to start over and look like a new loan with late payments. Unless u can get a pay for delete from the collection companies.  Remember a collection stays on your report 7 years.  Paying it off couod lower your score

Top Contributor

Reply by

52 Contributions
564 People Helped
Helpful to 6 out of 12 people

it will start all over again only if you make payments.  Otherwise it's still going to fall off in 1 1/2 yrs.  Mortgage companies will want all of that paid in full before they give you a loan.  

Reply by

4 Contributions
31 People Helped
Helpful to 11 out of 13 people

thats what i think too worst thing i did once was pay off a card i had sitting in collections several years once you make any payment or change it will hit your credit like a anchor & be on there far longer for everyone to see

Top Contributor
11 Contributions
77 People Helped

Helpful to 19 out of 24 people

Wish I could link a jpeg.

Do not call collections agancy, send a letter with a proof of reciept (think its called that, thepost office will know)

Send debt validation letter

wait 30 days

if debt is valid, try to settle

if not send follow up letter to collections agency

wait 15 days

if agency validates, try to settle

if not send another letter demanding agency removes info in 5 days or you will sue

wait 5 days

if agency removes from your credit report, you are done

if not, file a lawsuit.

Top Contributor

Reply by

11 Contributions
77 People Helped
Helpful to 30 out of 36 people

you need a paper trail, thus the letters.

do not admit to debt. the debt validation is their job.

if the debt is past the statute of limitations, send a FOAD letter (F-Off and Die)

I had one agency claim I owed over $15K. the alleged debt was 14yrs old (did not show on credit report)

agency sent me a "friendly" reminder letter and that I could pay off the debt with "3 easy payments"

I sent a FOAD letter

they replied with a 1099-C (debt cancellation tax form) which if I recognized it would have totally screwed my tax filing (I would have owed state & fed taxes a rather large sum)

I replied with a letter to the BBB, IRS, my state DA, their state DA and of course CC'ed the agency.

They replied with a "corrected" 1099-C showing debt of $0

Top Contributor

Reply by

11 Contributions
77 People Helped
Helpful to 12 out of 16 people

Forgot to mention:

The FOAD letter is only for alleged debt that is outside the SOL (statute of limitations, every state varies, check yours)

in your letter to collections, DO NOT SIGN IT! In fact, do not have your handwriting in any form on that letter.

People have been sued by collections and found out in court their signature on documents they have never seen before.

1 Contribution
1 Person Helped


Helpful to 1 out of 1 people

Dispute the collections, saying it's not you, or you could call a credit repair to help you as I am, they are located in Sumter, SC, on broad street.

Good Luck

Results 1-5 of 29Results per page: 5 | 10 | 25Page 1 of 6   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.


Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.