Once an account goes into default and becomes a collection, it is considered a derogatory (negative). The damage to your credit remains, regardless of amount owed, whether it's paid, unpaid or settled. The impact to your credit score is calculated primarily based on the month/year the information is last reported to the credit bureaus. Much of lending today is credit score driven. Lenders are less concerned with the details of credit issues and more interested in the overall numbers. Reliance on details varies from lender to lender. A particular lender may be impressed with the fact that you took responsibility for your past debts and paid them in full. But if your score is not "within range" they will not be able to make an exception to grant you a loan. The best option for consumers is to offer to settle derogatory debts in exchange for removal of all negative data from their credit reports. This benefits the collection agency, by getting paid, and the consumer, by improving their credit. Complete removal of all negative information is the only way that paying or settling collections can improve your credit. A paid or settled collection account is still derogatory. It can remain on your credit report for 7 years from the last time you paid the account on time immediately prior to the default.
It is always best to get paid on your account. Once it has gone to collections, the credit ding is there. So, get the best deal you can in settling the account and pay up. Make sure to get a paid receipt and watch your credit report until the change shows up.
Personally speaking, it is better to settle with a collection agency rather than making monthly payments. Theres only one ceveat....you must pay the collection agency in full. Example, lets say you owe $1000 to a credit card company. A collection agency will say, pay $600 NOW and this will settle the balance. So, if you dont have $600, its a 'catch-22'. You are better off making the monthly payments until the $1000 is paid.
Assuming you can pay off $45k in 12 months, go with that. It will reflect on your credit report and your FICO better for you if you pay it off rather than settle the account. Unless, of course, the credit card company agrees IN WRITING that they will reflect on your credit report that the account was PAID IN FULL/SATISFACTORY for the $18,000. If that's the case, take the settlement deal and run!!!
It will raise your score slightly. If you don't settle a delinquent account, the verbage on your credit report may read: "collection account", or "unpaid collection account". However, if you settle, the report may read "settled". By settling with the debt collector, you have made an attempt to fulfill your financial obligation. Therefore, your score will raise slightly.
Yes, and this happens all the time. Do your research first though, because this is usually not a good idea. Negative items typically stay on your Credit Report for 7 years from the time of your last payment. When you settle with a debt collecter that starts your Seven years over from that date.
It is always best to get paid on your account. Once it has gone to collections, the credit ding is there. So, get the best deal you can in settling the account and pay up. Make sure to get a paid receipt and watch your credit report until the change shows up.
Personally speaking, it is better to settle with a collection agency rather than making monthly payments. Theres only one ceveat....you must pay the collection agency in full. Example, lets say you owe $1000 to a credit card company. A collection agency will say, pay $600 NOW and this will settle the balance. So, if you dont have $600, its a 'catch-22'. You are better off making the monthly payments until the $1000 is paid.
Always better to try settling with the credit card company before it goes to collections. Once it goes to collections, your credit rating (score) is effected greatly, and that rating stays with you anywhere from seven to fifteen years, and it can't be erased simply by paying off the debt - it will stick with you for what seems like an eternity and will hamper any and all efforts by a person seeking credit ever again.
Assuming you can pay off $45k in 12 months, go with that. It will reflect on your credit report and your FICO better for you if you pay it off rather than settle the account. Unless, of course, the credit card company agrees IN WRITING that they will reflect on your credit report that the account was PAID IN FULL/SATISFACTORY for the $18,000. If that's the case, take the settlement deal and run!!!
for a better place
They settle in the US to have a better life.
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For better recourses
It shows as a paid collection. Still a negative thing but shows you did settle account.
better for there crops
It tastes goodHelps wake someone tired upCan help to settle an upset stomach
It depends on your situation. It is always a good thing to always pay your bills. After all, these providers rendered services contingent upon them receiving payment from you. You do not need this lingering over your head. If the bills are sent to collections, it can follow you for several years. Debt collectors purchase accounts in bulk and to receive revenue if a payment has not been made, the account is sold and a new debt collector buys your account and it hits to your credit again as if the lates were current. It will affect your credit score and hinder you from purchasing real estate, motor vehicles, etc. The best thing is to call the debt collector and settle the account for less than what is owed.