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Does paying a recent charge off that has been transferred to a collection agency help your credit score or should you just leave the debt unpaid and wait out the 7 years?
Wiki User
∙ 8y ago
If you can affourd to pay it, then it will help your score to do so. However, If it will be falling off your credit report within the next 2 years, then it would be better to wait for it to fall off.
Paying off charge offs, or collection accounts, do NOT improve your credit score and can under certain circumstances lower the score. This is one of the fallacies about credit. A paid charge off is still considered a derogatory account. The factor that causes the largest deduction to the score is when the account was last reported by the creditor, not the amount or the status (paid or unpaid).
I appreciate the above. But the lender can and frequently does require you to pay off the old debt anyway. Moreover, that craziness in official scoring is true for maybe 6 months. Most importantly it is happening in what might be the more junior and mechanical part of the process of actually approving a loan... many more things will actually go into it than the credit score.
So, lets see, if I was a lender, now and 6 months (or even 5+ years)in the future, as how trustworthy do you think I would comparatively rate these two, or desire them as customers:
1) He has not made payments on his previous promises. He still owes others money that he doesn't seem able, or maybe it's interested in, paying. They probably have the right to seize what he owns, or makes as salary in the future. Salary/money, which if he is actually intending to pay me (unlike anyone else it seems), is what he might have expected to pay me with! And those others want to get repaid, and will have a right to an amount that will continue growing by fees and interest charges, so his expenses are actually higher already than he's telling me. I can require he pay off those old debts I guess, but especially if he basically uses my money to pay those off, do I really want to be in the shoes of those he isn't paying now?
2) He seems to have had a tough period and missed payment obligations for some reason, (but that was XX ago / there is an explanation in credit file). Gotta' say s/he really wanted to stay responsible/honorable and worked through it, made good on his promise overall and paid them. He doesn't seem to owe others now, at least not more than he seems able to pay on what he's making....
I don't know about you...but not only would I'd sure have to rate #2 MUCH HIGHER, I'd avoid #1 like the plague!
Wiki User
∙ 8y ago
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How many times and how often can a collection agency post an account to your credit report as a charge off?
A collection agency cannot charge-off an already charged-off account. The reporting of the STATUS of the account AS a charge-off can be reported every time they update with the credit bureaus. The 'date of status' must be the date of the ORIGINAL charge-off.
Can a debt be listed on your credit report by the collection agency as two separate entries with one as a charge off and the other as a collection fee?
Yes, the charge off is entered by the original creditor, and the collection fee is a separate debt.
If you settle an old credit card debt with a collection agency paying the negotiated price in full will the collection agency remove the collection from your credit report?
No the collection will not be removed from the credit report. They will show it paid in full.
How do you get a charge-off removed from your credit report after you have paid it in full?
You should send notification to the collection agency you paid in full. They will have the status changed. Carbon Copy the credit bureau.
What does it mean when your credit report states that you have a paid closed collection account on you credit report?
The original account with a normal credit company went to a third party collection agency. Only after it went to the collection agency was the debt paid and then the account closed.
Is it better to pay a collection agency or let them write the debt off?
if you pay the collection agency you can get back in good credit standings , ifyou dont they can get a judgment against you, and garnish your wadges , if they do a charge off it stays on your credit for up to 10 years know and it is harder to get credit with a charge off
How many times and how often can a collection agency post an account to your credit report as a charge off?
A collection agency cannot charge-off an already charged-off account. The reporting of the STATUS of the account AS a charge-off can be reported every time they update with the credit bureaus. The 'date of status' must be the date of the ORIGINAL charge-off.
How do you find out from a collection agency who sent you to them for collection when you never was notified that you were in collection you discovered it on your credit report?
File a dispute with the credit reporting agency.
If a credit card does a charge-off and sends it to a collection agency can the original creditor still try to collect?
yes
Can a collection agency report and collect a debt that is shown as a charge off from another creditor?
Yes. When creditors charge off accounts they send them (or sell) to a collection agency. The collector can request the debtor's credit report show that the account has been turned over for collection procedures.
Can a debt be listed on your credit report by the collection agency as two separate entries with one as a charge off and the other as a collection fee?
Yes, the charge off is entered by the original creditor, and the collection fee is a separate debt.
If you settle an old credit card debt with a collection agency paying the negotiated price in full will the collection agency remove the collection from your credit report?
No the collection will not be removed from the credit report. They will show it paid in full.
How many times can a collection agency inquire on your credit report?
Unless you have given a collection agency written permission to pull a full credit report they are in violation of credit laws.
What does a collection agency do to your credit?
They don't do anything. Failure to pay bills causes credit to be reported badly and your credit score to go down. All a collection agency does is go after you for the money.
How can you mend your credit after a paid collection?
Only the credit bureaus the collection agency can remove a collection from your credit report. The collection agency won't do it now since it is paid and they have no reason to. You can dispute it to the credit bureaus and ask for verification on the account. They will have 30 days to verify the items or it must be removed from your credit report.
How do you get a charge-off removed from your credit report after you have paid it in full?
You should send notification to the collection agency you paid in full. They will have the status changed. Carbon Copy the credit bureau.
What happens if you do not pay a collection agency?
if a collection agency isn't paid, the debt can be put on a persons credit report. The collection agency can also choose to garnish a persons paycheck.
