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

0 Contributions
0 People Helped
What should I do before paying off all my debt?
So I have about 2500 dollars in collections right now with 5 different companies. Yeah bad, I know. Anyways I am now able to pay it all off fully but I'm wondering what's the best way to go about it. I don't want to pay it all off and then have it still be on my credit report. How do I go about paying it all off and also having it removed from my report?

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

View your scores and reports anytime.

All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
179 Contributions
327 People Helped
Most Helpful Response

Validate, negotiate, pay, and remove

Helpful to 3 out of 5 people

Outstanding debt is always a negative on your credit reports.  And since your credit scores are made of positive factors versus negative factors, paying this debt should improve your score overall.  So if you are ready to negotiate on a debt, you will probably be better off talking to the creditor directly instead of a collection agency. This is because the creditor has more discretion and flexibility in negotiating with you, and may see you as a former and possibly future customer; thus more willing to assist in repairing your credit.

However, finding who OWNS the debt and if it’s current owner has all the required proof that the debt is truly yours will be your first priority. 

If a collection agency bought the debt from the original creditor, rather than the original creditor just assigning the debt to the agency for collection, the collection company owns the debt. And if you negotiate with and make payments to the original creditor after they already SOLD the debt to a collection company, the collector/owner of the debt may refuse to credit you for those payments and continue to pursue the debt through its own collection practices because they actually own the debt.

If the debt was sold to the collection company. You can still call the original creditor and ask if you can negotiate on the debt directly with them or if you must continue to discuss it with the collection company.  Just understand that original creditors that sell a debt to a collection company, might not be able to purchase the debt from the collection company, and you may be forced to work directly with the collection company anyways.

Ideally, the original creditor will immediately negotiate with you, and you’ll be able to work something out. Unfortunately, that’s rare. It’s more likely that the creditor will only take the debt back if you negotiate with the collection agency, establish a repayment plan, and make two or three payments under the plan. If this happens, the creditor may eventually give you a new line of credit, helping you rebuild your credit.

You can negotiate payoff of the debt in one lump sum, or perhaps you can negotiate a better payment plan. These are the same options available if you negotiated directly with the collector, although the creditor may be more flexible and willing to compromise. Also you may want to ask to have the negative credit information on the debt removed from your credit file, or shown as payment in full, if you make the payments under the new agreement.

Most importantly, is that whatever outcome you negotiate, you need to GET IT IN WRITING!!!  Put in writing any agreement you reach with the creditor (preferably in a letter from the creditor to you, although a letter from you to the creditor confirming the agreement and asking the creditor to correct any errors is better than nothing). Part of the written agreement should be an acknowledgement by the original creditor that it owns the debt and is willing to request a deletion of the debt once the balance of the payment arrangement is paid. Send a copy of the letter to the collector.  Once the debt is paid, they original, and any subsequent collection accounts should fall off of your credit, or if they don’t, you now have a letter confirming the arrangement that you can send to the credit bureaus for deletion of all of the associated accounts listed in your credit report.

Hope this helps.  Please humbs up if it does.

Reply by

2 Contributions
12 People Helped
Helpful to 1 out of 1 people

@Nunnyabusines's; Hi, your response to the question was very informative but i still am unclear about some things.  I too have some accounts in collections, and from what i can see the original creditor has sold them to collection companies. On a few of them I noticed that they were re-sold to another company right before they were due to fall off my report.  How can i get them to stop being sold? I'm not trying to get out of paying my debt, but i feel as though these accounts should have fallen off years ago and here I am still struggling with them.  Any advice as to where I should start? And, if I do negotiate with these companies to pay off the debt, will they be the ones to take the collections mark off my report or am I going to have to do that myself by sending in a receipt of payment to the 3 credit agencies? Thanks for your help!

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   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.