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Is it better to pay a charge off or collection account?

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Wiki User
2005-10-15 11:11:38
2005-10-15 11:11:38

I would pay the collection account. Try not to let the account get that far that it becomes a charge off. It would be better to pay them all on time, of course. They both do damage to your credit. The charge off is normally paid less than the original charge. After paying, they both will show paid on your credit file if the companies filed them correctly. Make sure you have the company mail you a letter of Debt satifaction with a statement notifying the credit bureau. This is your responsibility to make sure it happens. Good luck..

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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.

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Usually 180 days after DLA. Be advised a charge off does not indicate that the debt is not valid and subject to collection procedures.

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A collection account that has not been paid off.

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Charge off is a shortened version of "charged off to profit and loss". This is an internal accounting term for activity creditors take on defaulted accounts. For a consumer's purposes charge off = collection account. This is a defaulted debt that shows as a derogatory account on your credit file.

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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.

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The original creditor is required by law to charge off an account after a 180 day deliquency. In most instances the account is sold to a third party collector. The collection agency will continue collection procedures. If an equitable arrangement cannot be made with the debtor, the collector may refer the account to an attorney who may decide to file a lawsuit.

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Of course. Charge off is simply an accounting term. It is a shortened version of "chraged off to profit and loss". Companies will frequently charge off debts to clear their books. It has no bearing on a consumers' liability. If you did not pay the debt, you still owe, regardless of what it is called. For a consumer, charge off = collection account.

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A charged off account is similar to a collection on your credit report. The creditor has written off the debt owed and closed the account. The debt is still valid though and can be collected on. The charge off will lower your credit score unless removed. You can dispute a charge off and this give the credit bureaus 30 days to verify the charge off or it must be removed from your credit report.

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No. A creditor can report a paid derogatory account as delinquent PRIOR to being paid. But if you paid it off, the correct status is "paid" (collection or charge off).

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The collection company has probably charged interest sincethe day they received the account. The interest rate can differ from state to state on a charged off account. So yes, they can but that amount is not just for two months. You need to ask for a total breakdown on the account and see if the interest charged is correct.

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It is unlikely that the account was "sold" to a collection agency. Rather, the agency was contracted to recover the debt. The "charge off" of the account only affects the original creditor, and represents a loss reported against the company's taxes. If the collection agency has attempted to recover the debt and has been unable to, the original creditor will likely pull back the account and refer it to another agency in hopes of greater success.

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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

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No. Once an account has been in default for 180 days, the creditor by law must list it as a charge off.

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Whether the company is opertaing or not, does not make any difference. Proof of your account is still there.

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yes you can get a car loan however the interest rate will be high....your payment therefore will be much higher....

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Generally a collection agency will charge the company they are collecting for a percent off what they collect. They do not charge the person they are collecting from.

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collection i believe is a company that sets you on a payment plan to make it easier for you to pay. charge off you will never beable to get credit it is paid off but you will never be able to get a loan To my knowledge, charge off means the business charged it off as a loss and collection means they are pursuing the person for the money or paying an agency to pursue the person for the money.

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It would depend on the state laws that are apply to collection agencies and collection procedures. In many states they can add fees incurred for the collection of a debt and interest on the amount of the debt itself.

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I have a charged off account at the bank of 146.00 how do I pay that off when I'm unemployed I have a charged off account at the bank of 146.00 how do I pay that off when I'm unemployed

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Original creditors sale their accounts to collection agencies when the account has been past due and they have not effectively collected. At that time, the original creditor will charge off the balance from their accounts receivable and turn the account over to a collection agency. When the collection agency collects the debt, a portion of the amount received is paid the the collection agency and the remainder is returned to the original creditor as profit.

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Charged off is a shortened version of "charged off to profit and loss". This is an accounting term which describes actions taken by creditors to avoid showing loss (red ink) on their books. For a consumer, charge off is the same as a collection account. It is a defaulted debt that remains owing until paid in full, at which time it is called a paid charge off.

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Your credit report will show if an account was 30/60/90 days late. After 90 days, the account could show as a 'charge-off' or 'collection'.

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The Fair Credit Reporting Act allows charge offs and collection accounts to show for 7 years, plus 180 days from the last time you paid the account (on time) immediately prior to the charge off.


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