I have a store credit card that I defaulted on around 2002. The original credit card still shows on my report as a charge-off/collections. There is no collection agency on my report regarding this debt.
Yesterday I got a call from a collection agency about this debt. I told her I would only correspond via mail regarding this issue, (thanks to reading this forum!!) and she is mailing me a letter.
SO when I get the letter, what do I do? I have no problem paying it, it's just a couple hundred dollars, but what is the best way to go about it? Can I reply with a pay for delete letter when there is nothing from the CA to delete? Do I instead contact the original company and work with them? If I pay it now, won't that reset my 7 years? If I respond to the CA letter do you think that will end up on my report?
Why is it so complicated to try and fix past mistakes?
check this out:
TOS violation deleted--Morningstar
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Collection agencys usualy mail out a letter giving you 30 days to respond back, if there is no response they will then add to your credit file. Remember you can always negotiate the amount you are willing to pay. The original creditor may accept payment or they may tell you to deal with collection agency.Call and ask them[original creditor] if they will deal with you on trying to settle the acount, if they say yes ,you could then if you choose send them pay for deletion letter with agreement to pay full amount or negotiated amount ,it s up to you . Either way send a pay for deletion letter to either or. Its best to try and get this account deleted from your credit file completely.
7 years of negative reporting refers only to the date of the original delinquency...payments will not affect this.
Morningstar you post alot of good information, but that is incorrect. A payment WILL reset the clock on the 7 years. Absoutely not, do not make a payment!
This is the subject of a lot of confusion, but a payment will not reset the clock. A negative entry can only remain for seven years from date of deliquency (or charge off), whichever is later.
The 7-year period referred to in paragraphs (4) and (6)3of subsection(a) shall begin, with respect to any delinquent account that is placed for collection(internally or by referral to a third party, whichever is earlier), charged to profit andloss, or subjected to any similar action, upon the expiration of the 180-day periodbeginning on the date of the commencement of the delinquency which immediatelypreceded the collection activity, charge to profit and loss, or similar action.
Morningstar my sincerest apology as you ARE correct.
If a payment was made to the original creditor, it would reset it. However, since its with a CA it will not reset it as there is no way to make the account current. Once again, sorry :(
I lve Diem!
diem and morningstar you and I are on the same page. I have argued that fact here for several months. It starts the 7 years all over again if paid to the original debtor. I have seen it on bureaus that the debt stayed longer when a credit collection gets involved also. Dont ask me how or why but it does happen. Im still working on that one.
Let me see if I understand:
* If I don't pay anyone, the original debt will drop off my credit report 7 years from first deliq, which would be in about 2009, but the CA could harass me until then, unless I use the letters to drive them back.
* If I pay the original creditor, the 7 years starts over from today, so it will show as a paid collection (or similar) until 2015.
* If I pay the collection agency, the original late still drops off next year, but the CA will remain on my credit report until 2015.
So even though the "right thing" to do is pay my old debts, in this case I actually end up worse off than if I didn't?
That happens.
Our credit standing has gotten away from doing the right thing. Which in my opinion sucks. This happens all to often. Your in a catch 22 situation. Thats why the system sucks. Even if you pay the debt it will still show as a collection and paid which lowers your credit score. Its not set up to reward anyone for doing the right thing.
credit
This IS confusing. I guess you have to decide which is the 'less of the two evils'..in a way. Either way..your credit score goes down (if I understand this right). Depending what you decide to do, would your credit score go down LESS points, if you decide one 'approach' over another? I hope I'm explaning myself question clearly.
Good Question.
Ill have to let someone else with experience in that area answer that one for you. I think it will lower your score less if it shows collection paid but Im not totally sure. Either way it still lowers your score until it is taken off.
The scoring system is such that no one can figure it out even the bureaus. You can have exactly the same things showing on 2 bureaus and will have 2 different scores. Its very confusing and I work with this everyday. I still dont know it all and dont confess that I do. This is one area that Im trying to figure out. If I ever do Ill sure pass the information on.
Good Question
Whether collections are paid or unpaid they are still NEGATIVE on your account and are considered the same whether paid or unpaid. The older the collection is the lesser it impacts your score. Unless you have an agreement with a collector "Pay for Deletion" letter the only thing that will help your credit score is time.
debt
Do "Pay for Deletion' letters REALISTICALLY work? I mean, you can pay off a debt, if the SOL hasn't expired yet, and send a "Pay for Deletion' letter..and the debt will be taken right off, of your credit?
They tend to work; if the creditor or CA agrees to it.
It does not necessarily mean that paying your old debt will improve your credit score, instead it may in fact lower your credit score. However, you can always negotiate with your collection agency for deletion letter request while paying back your old debt.
Laura How does paying a debt lower your score. I am not saying that it doesn't I was just wondering how it worked out like that.
deletion
Do not allow anyone to "delete" an account - paid or not. Any party can come after you again and you will have no credit entry to support that you paid or that you owe a certain party. Repeat - do no allow deletion.
Been there - I know.
That makes sense, never thought about it that way, at least you have proof that you paid it then.
Wow that was a really great point. I still don't know what good the pay for delete really does anyway. I asked this on another post and didn't get an naswer.
Deletion should still work though. Proof is as simple as the letters that you negotiated with from them and receipt from money order or check, right?
Should be that simple.
But iss it ever?
Nope
Gotcha
2 months behind on credit card
Hi , I fell behind on cred it card payments ($5000 total). I called credit card co., they lowered rate to 10% and agreed to payments of $50 per month for 6 months. Of the $50 only eight dollars went toward the total bill. After 6 months my financial situation did not improve and I was faced with either buying my kids food or paying my credit card. I had decided to stop paying since food and shelter are more important. I had agreed to auto payments for 6 months, but noticed they kept widthdrawing from my acct for at least 3 months after the 6 month period. Now I stopped the payments, they are calling me night and day. What should I do? My my mother in law said she would loan me up to 1,200 for a settlemnt with them. Any help would be greatley appreciated!
reply
Hi Mel,
Your query has been answered at http://www.creditmagic.org/card/delinquent-payment.html#44030 .
If you have any other query, you can feel free to discuss that in the forum.
Thanks,
Aaron