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| Don't count on getting your collection account deleted. |
Death of the Pay for Delete
Let me explain. For those of you who don't already know, a pay for delete occurs when you pay off a collection and in exchange the collection agency deletes the negative entry from your credit report. The collection agency gets its money and you get better credit. Everybody wins, right? Not exactly.
You see, the credit bureaus have this little hang-up about accuracy. Imagine that. The bigger picture is at stake. The credit bureaus may maintain your credit information, but they make their money selling FICO scores to lenders. FICO scores are supposed to help lenders make financial decisions by accurately predicting your risk of default. A past collection account on your credit report is a great big red flag that practically screams, "Don't trust me! I stopped paying in the past and I'll do it again!" If the collection agencies granted everyone a pay-for-delete, that would skew the FICO's reliability – costing the credit bureaus money in the long run.
(Just for reference, the credit bureaus would really prefer that FICO tank just so they could push their ridiculous VantageScore on lenders, but since VantageScore is also based on your credit information, the same logic applies)
So what do the credit bureaus do? Simple. They lay the smackdown. If the credit bureaus find out that a collection agency has been handing out pay-for-delete agreements to debtors the credit bureau revokes the collector's ability to report debts. That may not sound terrible to you, but its a death sentence to a collection company.
Still Trying to Get Collection Accounts Deleted?
So the scenario goes something like this...you contact the collection agency, make an offer in writing to pay the debt in full in exchange for deletion and sit back and wait with baited breath for the collection agency's response only to receive something along these lines:
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| Guess who won't play ball? |
"We are not authorized to..."
"We cannot alter.."
"Our company does not modify..."
No matter what your form letter says, it can be summed up like this: The credit bureaus don't let us do that. Unfortunately, it usually comes out sounding like "We refuse to help you." This angers you and doesn't help the collection agency either. So you don't pay, the collection agency doesn't make any money, and nobody's happy but the three fat men on the hill (the credit bureaus, who could care less about you and your credit repair efforts).
Prior to the smackdown, pay for deletes were all the rage. Every credit repair forum you visited couldn't say enough about pay for deletes. Everyone had a different method or theory for "duping" the debt collector into accepting the pay for delete agreement. In reality, collection agencies were on board with this. After all, they don't really care if your credit report is accurate either – they just want their money.
Remember, collection agencies still play the game, but for them its a numbers game. Lets look at these two scenarios:
Jane owes $172 to Big Bad Debt Collector for an old cell phone bill she never paid. That $172 debt is really hurting her credit and she'd like to have it removed. Jane's smart enough to know that simply paying it doesn't help her credit one iota, so she writes Big Bad a pay for delete letter in the hopes that it will be willing to erase the negative entry in exchange for payment.
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| Money talks....to debt collectors |
Josh owes Big Bad Debt Collector a little over $5000 for an unpaid deficiency on an old repossession. Through the help of his attorney cousin and some heavy research, Josh has managed to get rid of the repossession notation – now he just has to deal with that monstrous collection account. Fortunately for Josh, the statute of limitations on the debt has expired so there is no chance that Big Bad could sue him. After six months of saving, Josh has $3700 to put toward the debt, but he won't bother if Big Bad won't delete the collection from his credit.
So who has the greatest chance of winning the pay for delete game? Josh of course. Collection agencies still hand out pay for deletes, but they choose the recipients with care. The bigger the debt, the greater your odds of getting it deleted. Jane has options for having her $172 debt removed, but a pay for delete isn't one of them.
Now you have to ask yourself, are you a Josh or a Jane? I'm very interested in hearing others' experiences with this. Please, add a comment, let me know how your pay for delete attempt went, be it a good experience or a bad one.
Related Posts:
Collection Accounts and Your FICO Score
Why Credit Bureau Collection Disputes Rarely Work
Collections on Your Credit Report
lee! i've looked all over the internet, trying to find people with success stories negotiating a pay for delete with citibank.
ReplyDeletei owe about 19k. the collection agency offered $8500. i was just about to send off a pay for delete letter offering $7600. but i already directly spoke to citibank and they claim they won't do this and sent me back to talk to the collection agency. however, the agent at citi is not a manager, so thought it would be good to follow up with a letter to the collection agency.
did you ever hear from anyone about their success stories? or failsures re: pay for delete?
Check the statue of limitations first.. establish they have a legal ground to collect. if it has run, take them on.... and DONT PAY.
DeleteHello Lee,
DeleteI have some accounts that ended up going to collections from 2007-2008. However they have been turned over to other CA and in the process of this they are now reporting more recent open dates like 2011. So I guess my question would be how do i go about dealing with this so they do not stay on my credit report longer then they should?
How old is the debt? If Citibank sold the debt to the CA, then Citibank has no grounds under which to dictate that the CA can or cannot utilize a pay for delete when negotiating with you. If the debt is beyond the statute of limitations in your state and you pay the $7600 you are restarting the clock and the CA regains the right to sue you for the extra $900.
ReplyDeleteWhether or not a pay-for-delete is an option for you depends on which CA holds your debt and whether the CA is under a commission contract with Citibank or purchased the debt outright. Citibank works with a variety of collection agencies, all with their own varying policies that may or may not mirror Citibank's
If your debt is old and past the SoL, just leave it alone. The last thing you want to do is stir the pot.
Citibank is a tough bird. I have not yet encountered anyone who was successful negotiating a pay for delete with them. I have, however, known someone who placed a restrictive endorsement on his check noting that if Citibank cashed the check, it agreed to delete the tradeline and write off the balance, which it did. Keep in mind, however, that Citibank may not have a say in this process anymore if they already sold your account.
I have a past account with Citi-called them to do a PFD (see if it was even an option)... it was... only if paid in full. Unfortunately, the account balance was originally ~1,200, ballooned to over 4K with interested and charges. With it completely paid off in full, they were willing to entertain a PFD... I'm not sure what I've decided to do...Just wanted to give a heads up. This is the only bank I've had experience with willing to do a PFD, despite going to CA already.
ReplyDeleteBe careful with that one. Citibank may seem willing to play ball, but their tune may change if you ask them to put it in writing.
ReplyDeleteUnfortunately, I've seen a lot of CA's and OC's approve PFDs verbally only to deny any knowledge of the agreement when the debtor finally pays off the debt. If you go this route, get the PFD in writing and signed by a company rep beforehand.
That happened to me, and I can not get it changed.. and now they have added on 5 years of reporting... it will come off cause I am not giving up on it.
DeleteI'm a Jane. I have a collection of $58 from an old T-Mobile account that I closed. They sold it to RPM and they called and called and called. I offered to send it in via money order but they got mad and hung up. Imagine that.
ReplyDeleteThey called again the next day badgering me about getting access to my checking account so they can take the funds and be done. I said absolutely not. There is no was in hell I'm letting some CA get access to my bank account. I asked for their physical address so I could send in a money order and it took ten minutes just to get that. I kept saying "No I will not give you my checking account info." Whats with with them wanting that so bad? I thought money was money. I know about quotas and all that but at least I'm trying to send in the money.
But I was wondering about doing a PFD because this is reporting on my credit reports and I want it off. But for $58 I doubt that they are going to work with me.
Damned if I do, damned if I don't.
I would contact T-mobile and explain this situation. Never give debt collectors your bank information, there's no when or how they will use that info.
DeleteHey Lee - Any stories of PFD working with Capital One? A $2000 account was sent to a CA three years ago, now around $3200. I was thinking of offering the CA $1000 for PFD, but I'm not sure if they have the authority or if they need Capital One's approval. CA is NCO Financial Systems, but I also get letters from Capital One Solutions occasionally. Also, I think when I started the account I was in New York, but when it went to collections I lived in California, as I do now. Which state's SOL applies? I'm hoping California, since it's 2 years shorter. Thanks for any insight
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteKahit,
ReplyDeleteSounds like Capital One still owns the debt and NCO is collecting on a commission. When you move, SOL laws get tricky. If NCO tries to sue and the California SOL has expired, you can try to use that as a defense, but you can rest assured that NCO will try to enforce New York's SOL. If you've lived in California more than 6 months that strengthens your legal protection against a lawsuit, since you are a full legal resident of California.
Unfortunately, Capital One is notoriously hard to work with. I have never encountered a successful pay for delete with them. That doesn't mean, however, that you shouldn't try. You just never know.
NCO is very abusive... and you can sometimes get an attorney to sue them for more than what you bill is... how about that... Just write a letter to NCO and tell the all correspondence has to be in writing, and no phone calls will be accepted. Keep track of their behavior. It is $1000 for each violation..
DeleteChelsea,
ReplyDeleteThe good news is, even if you don't get a PFD, your collection account isn't destroying your credit score. Collection accounts under $100 are all but ignored under the new FICO scoring formula. Unless you have other negative information showing up on your report, you should have no trouble during a credit check.
If a lender pulls your full report rather than just your credit score, they may ask about the $58 debt, but it doesn't reflect as poorly on you as it would if you owed, say, 5k.
Lee-
ReplyDeleteThanks for the website and information. I am in a situation with Citi where my account (~$8,000) has been referred to a collection agency. It has been with the CA for about a week now and I'd like to pay this off and just move on. Looking back at documents from a month or so ago, Citi was offering to settle the account for $3,500, I mentioned that to the CA and they were not interested in acccepting payment for that amount.
After doing some research on CAs, it seems like dealing with them will be a rather unpleasant experiance. So, I contacted Citi and attempted to work with them directly. The first 4 to 5 people I spoke with indicated that the account was not in their possesion and they could not work with me. I finally spoke with someone that forwarded me to their account specialist who indicated that Citi still owned the debt and that the CA was working on their behalf. However, they could only accept payment in full and over the phone. They indicated that they were not in a position to perform a PFD. They also indicated that I could mail in payments to the account for less than the total, but that wouldn't stop the CA from contacting me. Based on those exchanges, is it safe to assume that the account is still owned by Citi?
So, with all that said, should I continue to harrass Citi and try to find someone that will grant a PFD? I am willing to pay up the $8k for the PFD as it would seem that having this account off my record would be more cost effective in future credit situations (e.g., home or car interest rates), but it may take a bit of time to get the money. Or would I be better off working with the CA and try to work a PFD? My one call with the CA was pretty unpleasant and I'd prefer to avoid working with them if possible.
Finally, is there any benefit to mailing in partial payments to Citi at this point or should I just save the $ and make one large payment to pay it all? I realize that the PFD is not a sure bet, but I am hopeful that my situation would be favorable for obtaining the PFD.
Thanks for any advice you can provide.
When it comes to Citi, a PFD is nearly impossible. I know that isn't what you want to hear and I feel for your situation, but if it were me I'd just sit on the money. There is no reason to pay either Citi or its CA if doing so doesn't help your credit.
ReplyDeleteI think its safe to say that Citi still owns the account. If they make legitimate motions to sue (and they might for that high of a debt) then you could pose your PFD offer, but there's no guarantee that it would work. Citibank is a beast.
The odds are much better of working out a PFD after Citi no longer owns the debt.
Hi Lee. I hope you read this and might have some advice. Me and my husband plan on purchasing a home in the next year and are currently in the process of paying off all of our other debts. A few years back (2006-2007) we didn't have any income and a few things ended up in collections. We are finally in a place where we can afford to pay off everything in collections, but are not sure how to go about it. We know that the debts are ours and can afford to pay the total amount (altogether around $2500). Until I read your article I assumed the pay-for-delete would be the option. Should we instead write letters along the lines of "we'll pay the amount owed for a paid status in our credit reports"? Will they most likely accept or reject that offer? Any advice would be appreciated. Thanks!
ReplyDeleteHi Lee. I hope you read this and might have some advice. Me and my husband plan on purchasing a home in the next year and are currently in the process of paying off all of our other debts. A few years back (2006-2007) we didn't have any income and a few things ended up in collections. We are finally in a place where we can afford to pay off everything in collections, but are not sure how to go about it. We know that the debts are ours and can afford to pay the total amount (altogether around $2500). Until I read your article I assumed the pay-for-delete would be the option. Should we instead write letters along the lines of "we'll pay the amount owed for a paid status in our credit reports"? Will they most likely accept or reject that offer? Any advice would be appreciated. Thanks!
ReplyDeleteDONT! Check your statue of limitations first.. Nothing my be legally owed.
DeleteHow much would a $250 medical collection (5 years old) harm my credit score? I sent a PFD letter which the CA ignored and simply re-verified the debt. I am seeking business financing and probably a mortgage within 6 mo so every little bit helps. Is this worth much effort (at least a phone call) or is it most likely ignored by anyone checking my credit?
ReplyDeleteHi Lee, have you ever heard of Fireside Bank dong PFD's? I have an old debt that is past the statute of limitations but I make enough now to take care of it if they will remove the record. I would like to buy a house so I think this would be a good thing.
ReplyDeleteAlso, what happens if I pay the debt? I have heard the difference between what they say I owe and what I paid will go to the IRS and I will be taxed?
Thanks!
I've never even heard of Fireside Bank. If its not a large-scale operation your chances are somewhat higher of getting a PFD, just make sure you speak with someone with the authority to makes those decisions.
ReplyDeleteThey can claim the difference between your debt and what you paid as a business loss and send you a Form 1099-MISC for the difference. Yes, you would need to pay taxes on it. If you're aiming for a PFD though, your best odds occur when you pay the entire debt. Paying the entire debt leaves them with no losses to report to the IRS.
Sheryl,
ReplyDeleteHow much a $250 collection hurts your credit score depends on what else appears on your credit. There really isn't a way to estimate it. In general, the better your credit is when the negative item appears, the more damage it will do. If you apply for a mortgage, your mortgage lender will likely require you to pay off the debt before approving your application.
It's always worth the effort to remove collections over $100, but make sure you aren't waking the beast. If the SOL has not expired, the collection agency may sue you as soon as you apply for a mortgage. Take care of this before you try to get a home.
JLS,
ReplyDeleteIf you pay it, they HAVE to update your credit report to "paid" status. That's the law. If I were you, I wouldn't make a move until I was sure that the SOL had expired on those debts. Some collection agencies will slap you with a lawsuit the second they realize that you have money with which to negotiate.
If you can afford it and a lawsuit isn't a threat, keep calling and writing and offering to pay the full amount in exchange for deletion. Get it in writing. It may not work with all of the accounts, but its worth a shot. With a debt that high, some greedy collector lusting after his/her commission might just take you up on it.
Hello Lee,
ReplyDeleteI'm hoping you can give me some guidance.My credit scores are very low and I would like to start rebuilding my credit. All the negative items on my credit report are medical bills, most originated in 2006, but the most recent activity is 2008. I have eight accounts with one agency, PMAB with balances ranging from $14 to $242. The total of all the accounts is $818. In 2006, I lived in North Carolina, but now I live in New Jersey. Should I try a pay for delete? If so do I need to send a letter for each account? Thank you for any assistance you can provide!
You have an interesting situation. First, let me clarify something: the reporting period for collection accounts begins on the date the debt first went 180 days delinquent – not the date you last paid the debt. That date determines the statute of limitations for lawsuits.
ReplyDeleteYou can always try a pay for delete, but I doubt that the collection agency is going to delete 8 entries in exchange for payment – especially since the amount you owe for each debt is relatively low. Keep in mind that negative balances under $100 do not negatively impact your credit scores.
If you can afford to pay off the full amount you owe, you could contact the company and try to work out an arrangement in which you pay off the debt and the collection agency combines its eight entries into one paid entry. That probably carries a better chance of success than a pay for delete.
If you go this route, get the agreement from the collection agency in writing before you pay.
I owe a debt of $370 to Convergent Outsourcing for an unpaid electric bill that shouldn't have ever existed (I had moved out of that apartment). It has been on my credit, now, for about 2 months. What is the likelihood of getting that removed via a Pay For Delete, letter?
ReplyDeletePaul,
ReplyDeleteThere's good news and bad news. The bad news, of course, is that its highly unlikely you can remove that electric bill via a PFD. The electric bill isn't likely high enough to make it worth the risk for the collection agency. The good news here is that if you can prove you had already moved out of the apartment when the charges were incurred, you may be able to legally strong-arm the electric company into recalling the debt.
Lee,
ReplyDeleteMy wife has a $258 debt that is currently held by Credit Protection Association for Time Warner Cable in Texas from September 2009. It's the only negative account information we have. I was disputing charges with Time Warner and without notice they put the debt on collections. They claim they sent 11 letters to my address and called me several times. I've offered to pay the amount in full as long as they remove the item from the report but they refuse. If they won't remove I won't pay. I've also managed to refinance the house without paying the debt (simply writing an explanation letter) but we just don't want it there. Any suggestions?
Before you start doing direct battle with the CA to get the neg off your credit report, pursue your fight against Time Warner. You'll need some form of proof as to why you don't owe the debt or the amount is incorrect. Write to higher-ups in the company, complain, be public about it, write your attorney general, be a nuisance. Sometimes this works with big companies.
ReplyDeleteUnfortunately, there's no quick fix for collections once they're there. Get Time Warner to cave and the CA will have no choice but to delete. Best of luck.
Wow Lee, this is the place to learn how this business really works. Much appreciate your knowledge. Facts: LTD Financial owns the paper on this charge off no longer on the credit report (7 1/2 yrs elapsed) but SOL still in effect due to monthly payments; given 30% ($5K payment) settled in full offer but pay for delete denied (they send acct balance 0 letter after payment only). They did say they own the paper and have the "power" to delete once paid. Any chance in your mind of that actually happening once I request the same, post payment? Any chance if offer more, say $1K, they would budge, etc. Your thoughts and hope this helps others.
ReplyDeleteFirst of all, the SOL for lawsuits has no bearing whatsoever on the amount of time information remains on your credit report. It only dictates the amount of time the collector has to sue you.
ReplyDeleteThat being said, the credit reporting period for collections is seven years. The total reporting period is 7 years and 180 days, but creditors rarely send debts to collections before they are 180 days late. So for our purposes, the debt can only remain on your credit report.
The Fair Credit Reporting Act notes that 7 years and 180 days from the date the account first went delinquent, all information pertaining to that account (except for judgments, which doesn't apply to you if you haven't been sued) must be removed. What this boils down to is that if the original creditor's trade line has "aged off" your credit report, the collection agency's should as well. If the collection agency's trade line remains after the original is gone, you have a very valid dispute on your hands for obsolete information.
Write to the credit bureaus, include a copy of your credit report. Note that the collection agency's trade line is obsolete. If the collection agency "reaged" the account to make it appear more recent and remain on your credit report for longer than is legal, you have full right to sue them.
Of course, you could always tell them you'd be willing to let that slide provided they follow federal law and remove the negative entry from your credit report immediately.
Lee, I have several accounts with one CA for some past medical bills. I called them and asked if they would delete the accounts for payment in full. They said no, which wasn't a surprise but said that they would update them to zero balance. My question is this ,is it better to get total deletion or have a zero balance on my credit report? My goal is to raise my credit score. Can I do anything else?
ReplyDeleteLisa,
ReplyDeleteIt's far better to get them deleted from your credit report. The collection agency is required by law to update your credit report to reflect a zero balance, but that does not improve your score. Let me repeat this, because its important: PAYING COLLECTIONS DOES NOT RAISE YOUR CREDIT SCORE. It's up to you to decide whether its worth paying – especially if the debt is beyond the statute of limitations and the collection agency can no longer sue.
If your goal is to raise your credit score to buy a home, most mortgage lenders will require that you pay off all collections on your credit report before approving your application – even though doing so does not benefit your credit scores.
Lee,
ReplyDeleteI am in the same situation as Mel. I have five accounts for medical bills with one CA. I tried to do a pay for delete and they said no. My amount totaled $700. I can afford to pay the total amount that is owed on the accounts. Should I pay and have them update the status to paid on my credit report? Or Should I keep sending letters? I also have the option to pay the hospital, which is the original creditor, and not deal with the CA at all? The hospital said that they would update my status to the CA. My goal is to improve my credit score. Any suggestions would be helpful.
Lee,
ReplyDeleteI wish I saw your site yesterday. I had a medical bill about 5 years ago, and there was some back and forth negoition with the clinic and insurance company by then, and I didn't hear about it any more unitl late last year. It appeared to my credit report by a collect agency.
I used to have perfect scores (~800), and now my score dropped to ~700. When I noticed that I immidiately contacted the collect agency today and paid the balance in full (~$90) by phone. I asked if they could remove it from the reports and they said no. Again I wish I saw your site earlier.
Now my quesitons: Is it still possible to do the PFD after I paid in full on the phone this morning by credit card? if not, how much is it going to hurt my credit? As I said my score dropped almost 100 poionts, can I expect to see it bounce back after I paid it?
Many thanks to you in advance.
I have $1400 from medical bills from 2010 that were sent to collections and are showing negatively on my credit report. I am currently trying to refi my house as a result of a divorce agreement and would like to know the best course of action to take before I submit my refi paperwork. What should I do?
ReplyDelete(responding to comments in the order they were recieved)
ReplyDeleteLisa,
If you have the option to deal with the hospital then the hospital still technically owns the debt and has merely hired the collection agency to collect it. The hospital CAN pull your account out of collections. Sure, its much easier for you to just pay them and for them to "update" your status, but that doesn't help your credit any. Paying collections does not improve your credit score. The only way that paying this debt is going to improve your credit is if the hospital agrees to remove it.
They may say they can't. That's not true. They have a contract with the CA. If you pay the hospital, the hospital then terminates its contract early. If they can terminate their contract after receiving payment, they can terminate it before receiving payment as well. The only way to improve your credit is to get the entry off. Paid collections don't help your scores.
ML,
ReplyDeleteI've got good news for you and bad news for you. The bad news is that a collection has the same negative effect on your credit scores regardless of whether it has been paid or not. So no, paying the debt won't help your score one bit. Neither will the collection agency honor a PFD after receiving payment. It has no incentive to do so. Remember, when a collection agency accepts a PFD, it is risking its contract with the credit bureaus. For extraordinarily high debts, the CA may just take that risk. For an account that has already been paid in full? You'd be more likely to win a free trip to the moon.
Possible good news: The numbers you gave are indicative of FICO scores, but I have to wonder if you were pulling some other type of score. FICO's new scoring formula is supposed to ignore collection accounts for debts under $100. They'll still show up, but under the new formula their impact is supposed to be minimal. Did you pull them directly from myFICO.com? If you didn't pull FICO scores, there's a fair chance your FICO did not sustain the same damage under the new formula.
The good news: Paying a debt isn't the same as admitting guilt. Thus, you can still dispute the account with the credit bureaus even after paying in full.
Briand,
ReplyDeleteI've told the last two posters that paying off collections doesn't improve your credit scores (and it doesn't) but mortgage companies are notorious for refusing to approve a mortgage application (and that includes refinancing) until all collections are paid in full. You may not have a choice in the matter but to pay them.
Unfortunately, credit cleanup can take months. If you can wait on the refinancing, working on your credit could save you money – especially if you can successfully have these negative trade lines removed before the lender pulls your credit record. If you are pressed for time, there is no harm in submitting the paperwork and waiting to see what the lender says. You won't get the best interest rate, but there is no 100% guarantee that the lender will force you to pay off your old debts.
Lee, great blog you run here :)
ReplyDeleteI received a call from a collections agency today regarding an old account where date of first delinquency was around Dec 2006...had completely forgotten about it. I was told this was sold to the collections agency in 2009.
I reviewed credit reports from all 3 agencies today, but my reports have neither the original creditor or the collections agency listed. Essentially, my report is as clean as a whistle.
It's a small amount that's not an issue to settle, financially, but over $100. I'm worried that if I settle improperly, it'll end up on my CR as paid in full and if I contact the original creditor directly, that it would reopen the entire process and would also end up on my credit report. I want to avoid doing anything that would get this "refreshed" and stuck on my record for another few years.
Should I try to go for a modified pay-for-delete, or in this case, pay-for-no-reporting? I'm looking to apply for a mortgage soon, so the last thing I need is a negative like this appearing on my report.
Best Regards.
Hi Lee, I wan to thank you for all the information becuse I was living in la-la land thinking I can clean up my credit and raise my score in about 3 months.
ReplyDeleteI have a few negative accounts on my credit, and my score is REALLY poor only one account is for a store credit card and the others are things like employment commisionand medical bills. My husband and I want to buy a house next year. I've seen you post stating that paying off collection does not raise your score, but mortage lenders require you to do so. I wanted to know how can I raise my score while paying off accounts. I would be denied for any type of credit card so what else can I do. I pay my bills on time, but thats not helping much? I am just completely lost.
Hi Lee, I have quite a few items on my credit report that are in collections. I have the money to pay them off, but I understand that even if I pay the items off, the items will not be removed from my credit. Would you recommend paying the full amount or settlement offers? These items have been on since 2007. I am in the process of trying to get an apartment but I was denied because I broke my lease in 2007 and I never paid the balance of $1040. I want to settle the account and get it deleted. I'm so lost, I don't know how to fix this. Would you recommend paying the account and trying to send a Pay for Delete Letter?
ReplyDeleteThanks a bunch,
Tami
Hey,Lee.I am glad to see this website. I have same situation as Lisa's. I dealt with CA for my medical bill collections(6 accounts and total amount is $1000), and it wasn't pleasant to talk to CA. They said they don't have the right to do PDF and kept hanging out the phone on me. I then decided to contact hospital. But the perosn I talked to said she never heard PDF and can't do it for me either. I have to pay all the collections in order to purchase a house by the end of 2012. My credit score used to be great, but now it drops to 600. I know paying off collection doesn't improve my score unless it was remove from my credit report. But if I don't pay,the score will keep getting lower. What should I do? Should I keep calling hospital and talk to the "right" person who is willing to PDF? I rather talk to hospital than talking to CA who are really rude. Thank you for your help!
ReplyDeleteK.M
Lee, I have 2K worth of debt with Citi and they have offered me a settlement of $600 after 3 months. I talked to them over the phone and they denied to go with PFD and they insisted the payments be made by a personal check or a bank account via online. Frankly speaking, I don't have the money to pay the debt in full as I am an international student right now. So what should I do. (On a side note: I also have 3K debt with Chase which is past due over 3 months).
ReplyDeleteWilliam,
ReplyDeleteIf you can pay this, keeping it off your credit is no biggie. Contact whoever owns the debt and offer to pay the amount in full in exchange for a written statement from the debt owner NOT to report the account to the credit bureaus. Collection agencies usually don't mind doing this. Just make sure you get the letter before you send in the payment.
Nique, your question deserves a more involved answer than I can give in the comments section. I fully intend to make a post answering this question (because I get it a lot) within the next couple of weeks. It would be sooner, but I'm in the process of buying a house myself right now and its stressful as hell.
ReplyDeleteAnonymous from Jan 31
ReplyDeleteIf the items have been on your report since 2007, why not figure out when the accounts first went delinquent. Remember, the credit bureaus have to delete those entries 7.5 years from the day the original account went 180 days delinquent. Sometimes collections don't show up immediately. If you've only got a short period of time until they disappear, you could always wait them out. Otherwise, pay the settlement.
Anonymous from Feb 1
ReplyDeleteNot paying the debts won't make your score get worse. Provided the mortgage lender doesn't demand that you pay off these debts (and many don't if the debts are medical in nature) you can get an FHA loan with a credit score of 620 (this is current info as of 3 days ago). If they won't do a pay for delete you can't force them to...but you could dispute the items if any information happened to be inaccurate...just saying..
UM,
ReplyDeleteHave them send you the settlement offer IN WRITING. Open a new checking account at your bank. Put only the amount of money in the account that you need to make the payment each month and pay out of that account.
Hi Lee,
ReplyDeletegreat blog. I really appreciate your knowledge and willingness to give advice. A little over 2 years ago, I settled 9 credit card balances (3 with chase, 3 with B of A, 1 with wells fargo, 1 with citibank and 1 with capitol one). I went through a debt settlement company. Man, I wish I did not do this, but I did. I settled the debts due for approximately 50cents on the dollar and did not settle until the accounts were many months past due. Some of the accounts were charged off and I think one went to a collection agency. The largest balance I settled was a ~$24K b of a line of credit for ~$12K. The other 8 acct I owed anywhere from $4k to $7.5K and again settled for approximately half that. The accounts are reported as settled on my credit report. I now have a great job, and have money. My FICO is 646. I desperately want to improve my credit score so I can buy a house with good terms and so I can refi my house at a lower interest rate. So I have the money to try and pay off the amounts I previously settled. Although I know in your blog you mentioned this can be very difficult if not impossible (you said Citibank is a beast and CapitalOne is tough). I want to know if you have any advice. If you know of anything that could help me. Or any resources that could help me. I also have no current credit card accounts and was told getting a credit card even if secured and using it and paying it regularly could help. I have education loans that I have a 100% on time paymeny history with and a mortgage that I have a 100% on time payment history.
Thank you for your time and any help - Nick
Anon,
ReplyDeleteWhile I have to agree with you that debt settlement companies are the devil, using one may have just saved you in this situation. The agreement the debt settlement company negotiated with the credit card companies *should* state that, once settled, you owe no further payment. That's legally binding. I'm not surprised that they've sicced the collection dogs on you, but odds are you no longer owe the balances they claim you owe. If you don't have a copy of the agreement, get it. As long as its in writing, you have grounds to demand that the collection agencies remove those accounts from your credit reports and your credit score will improve.
Hi Lee,
Deletethank you so much for yor prompt and detailed reply. You are awesome for helping everyone here out. I do not think I was clear in my previous post. I have settled 9 credit card accounts. 2 of these, one with Wells Fargo and one with Capital One were reported to collection agencies, with whom I then settled with. These 2 accounts ended up being reported as charged off. Specifically, they are reported on my credit report as "acct sumbitted to collection, creditor settled for less than amount due charge off". Is there anything you think I can do to improve my credit score with these two settled->collections->charged off accounts? Do you think there is anything I can do to improve my crdit score with the other 7 settled credit card accounts. Thank you so much for your time.
-Nick
Ah, I think I see what you're saying. Unfortunately, you can't control what the original creditor reports. It's a legal gray area as to whether I can tell you to dispute the accounts if they're accurate. If it were me, I would examine the accounts for any hint of an inaccuracy, wait at least 18 months, and then dispute. Most credit card companies do not keep closed account records for longer than 18 months. If they can't verify the account, the credit bureaus have no choice but to remove it. Theoretically, you could then begin disputing the collection debts due to their being directly related to a credit entry which was *proven* inaccurate and subsequently deleted. You get me? It's quite the process, but its a liberating process.
DeleteHi Lee, I am glad I found your site. Last year I settled a debt with Citibank through Zwicker & Associates and received a letter that the debt was settled in full. Just last friday I received a letter from another CA that they are collecting on behalf of Citibank. The amount they are collecting is the amount I did not pay in full. I went to another site and they advised me to send a letter to the CA stating that I settled the debt in full already and received a letter and provide a copy of the letter. I also did another research where some creditors can collect again on unpaid balance but it is illegal in some states. Since I am from GA and the site listed GA then I should be fine if I let the new CA know about the settlement. Correct?? The thing is that I still have another Citi card but it was open through Homedepot that is closed now and still making min payments on. Please advise me if I should be fine so I can stop stressing.
ReplyDeleteThanks,
Lauj
The original advice you received, to send the CA a letter stating that the debt was settled in full and provide a copy of the original letter demonstrating this fact, is sound imho. You might also want to pull a copy of your credit report to make sure they aren't reporting a debt they shouldn't even be collecting.
DeleteHi lee,
ReplyDeleteAs with many others on here I have been trying to get my husband and myself a mortgage loan and poor credit is biggest factor. I have managed to get a public record deleted off my report through dispute as it was a duplicate of a paid collection account but have several others to sift through. From reading all these posts and now learning that paying these past collections does not improve the credit score, I am curious to know if it is still possible to get a mortgage loan with a low score as long as every thing is paid or if I still would NEED to go through all the hasle of trying for PFD's to raise the scores. any info would be greatly appreciated thank you lee.
That really depends on how low your score is. Personally, I'm curious how you managed to get a public record removed because it was a duplicate of a collection account. Duplicate collection accounts are not allowed, but its perfectly normal for there to be a judgment, bankruptcy, etc. sitting around on the same report as a corresponding collection account.
DeleteWhile FHA loans technically allow consumers to obtain mortgages with scores as low as 580, the majority of lenders will only grant you an FHA loan if your scores are 620 or above. Before you even get started with credit repair, you need to pull your actual FICO scores to see where you stand. You can pull these directly from Fair Isaac at myfico.com. You can only get your FICOs through TransUnion and Equifax. Experian does not sell FICOs to consumers. The older the collection accounts are, the less they'll hurt you. So even if you can't have them removed, you might be able to wait a year or so and try again. I noted a few methods you could try in a recent post: http://collectionagencydebt.blogspot.com/2012/02/improving-credit-scores-after.html
hello lee, yesterday i received an alert from my credit inform account that i have a collection account from my old apartment, 6 month ago i moved out of my appartment and i wasn't aware they were charging me for replacing carpet, cleaning the apartment and so on. the debt is for $1160, i have good credit and the reason why i didn't pay this is because i wasn't aware of this, i want to send a pay to delete offer to the collection office for $700 since I'm not doing good financially. is this a good option? what can i do in this situation?. i will appreciate your help, thank you :) miriam
ReplyDeleteIf it were me, I would contact the apartment manager directly and explain that I was more than willing to pay the debt, but was never aware of it. Remember, if the apartment complex stil legally owns the debt, they have the power to call off the dogs in exchange for payment. Contacting the debt collector directly and asking for a PFD should always be a last resort.
DeleteI received a letter from a collection agency last week stating I had an unpaid bill from a utility company on an account that I closed six months ago, around the time I moved. It might be the unpaid balance on the account and therefore may be legitimate, but I never received the bill or any notice about this money owed from the company itself until the letter from the collections agent. The bill is for around $200. I am willing and able to pay the bill now (and would have at any time if I had been aware of the bill). I don't want this to ruin my otherwise good credit rating. I am very upset that I might unfairly suffer for something that isn't my fault.
DeleteI have not done anything yet. What do you recommend? Should I request a verification letter? If so and the collections agency indeed represents the original utility company, should I ask for a pay for delete letter? Can I dispute the charge on the grounds that I was never notified by the utility company about the unpaid bill? Also, I do not know if the amount mentioned in the agency's letter includes interest, fees, etc. I really don't want to pay anything other than the original amount owed when this whole situation is due to someone else's incompetence. Can I dispute the charges even after receiving verification based on that fact?
If all else fails, how badly will this reflect on my credit history?
If it were me, I would contact the CA, explain the situation and ask for a statement noting that, if the account is paid in full, the CA will not report the information to the credit bureaus. It's not worth the credit risk to fight for reduced interest charges and fees.
DeleteUnfortunately, I see this a lot. Utility companies are terrible about contacting consumers who have moved. From now on, always obtain a zero balance statement from all utility companies after you move to protect yourself from this scenario.
I can't tell you how badly it will hurt you because it will impact your credit differently depending on the other information that appears on your report. In general, the higher your credit score, the more damage a collection account will do.
Lee, great site and help. I have to pay off my debts (2) that are in collections. 1 for $7K for Asset for an org debt of $5k from Citifinancial and the other for $9K from Calvary for a org debt of $3800. Both OC charged off. Both charge off dates are for March 2008, yet the CA have dates of June 2011 and May 2010 as opening dates. I was able to reach a settlement agreement of half of their amount from Calvary (which I still this is crock) they will not do a PFD and they said since they bought the debt that they can use the date they bought. I thought that the original debt date cannot change? Can you confirm this for me and what can I do if they refuse to adjust the date?
ReplyDeleteThe date of first delinquency (charge-off date) doesn't change. The date the CA is reporting is NOT the date of first delinquency. They can report the date they bought the account, but it does not affect when the account will age off your report. That's merely how they do business. The date of first delinquency is the same, no matter what your credit report says about the date the account was opened.
DeleteThey won't adjust the date because they have the right to report the date the account was opened. This doesn't hurt you. Now, if the CA re-aged the debt that would hurt you, but there often isn't any way to find out if they have done this or not until the debt is supposed to be removed and, lo-and-behold, it isn't.
Hi Lee,
ReplyDeleteMy husband has a collection on his credit report that we make monthly payments on. We tried applying for a mortgage about 6 months ago, and we were denied having him on the mortgage with the collection on there. We have the money to pay it off now, about $1500, but wanted to know if just paying off the account will be enough, or if we will have to do the PFD? Thank you for your help.
This comment has been removed by the author.
DeleteThat depends on whether you were denied because the collection wasn't paid or whether you were denied because the collection was dragging down your credit score. If the PFD is an option, try it. Otherwise, you can always ask your mortgage lender if paying off the debt would make you eligible for the mortgage. Mortgage lenders generally require that you pay off all collections before they will give you a loan.
DeleteKeep in mind that paying or settling the debt does NOT improve your credit score. The only way to do that is to have the entry deleted in its entirety.
Lee,
DeleteAccording to the mortgage lender, his credit score is fine, its just the fact that he has a collection showing on his credit report. Have you heard of any success with a PFD when monthly payments are already being made? Thank you for the help.
I can't think of any situation offhand where a debtor was able to negotiate a PFD if he was still making payments. The CA has no incentive to offer someone a deal if the person is likely to continue making payments anyway. Plus, every payment extends the SOL. Most CAs would rather sue than delete a trade line, so the odds of successfully getting a PFD in this case is slim to none – but note that I didn't say it was impossible. CAs are unpredictable beasts indeed.
DeleteThe good news here is that if your husband's credit score is fine, your mortgage lender just wants you to pay off the debt. That ensures that you have no outstanding liability that could end up as a lien against the home. Paying off a collection no longer "updates" the account, so your credit score should not suffer when you pay it off. And congratulations on your new home purchase!
Hello Lee...I have $10k debt on my credit report for a timeshare. Its being reported as a charge off. I'm not sure if the account is with the creditor or with the collection agency. But would it be worthwhile to try to PFD? I'm not sure how things work after being charged off. But I'm trying to repair my credit enough to eventually buy a house. I know that paying it wouldn't change my score. But would at least settling it have a positive impact on my report?
ReplyDeleteIf it has been charged off, one of two things has happened: either the original creditor has turned the account over to an in-house collection agency and still legally owns the debt or the creditor has sold the debt to a third-party agency.
DeleteSettling a debt doesn't help your score any more than paying it off does. Any payment you make looks better to future lenders that review your report than simply leaving the account unpaid
10k is a big debt. Whether or not you contact the creditor and attempt to negotiate a PFD is up to you, but if you have not heard from the creditor or a collector, sometimes its best to let sleeping dogs lie. That debt is high enough to elicit a lawsuit, and a lawsuit is likely if the creditor has any reason at all to believe you can afford to make payments (such as you attempting to make a partial payment or settlement). Keep in mind as well that payment restarts the SOL if it has already passed. This puts you in danger of a lawsuit.
Once again, its up to you what you want to do. If it were me, I would wait out the SOL and then fight like hell to dispute the information and have it removed from my credit report.
I received a letter from a credit card company offering to "Start Fresh.". If I make payments on this new credit card, it will pay off my balance for a previous credit card and establish a new line of credit. The original CC balance was $583.00 but it's only 4 years old so it will be a while before I can consider just ignoring it or walking away. Since paying off items doesn't appear to help raise my credit or FICO score, should I take on this offer to have my previous balance on a new line of credit or is this a scam by Midland Credit to take advantage of me?
ReplyDeleteWell, well, well, Midland is still pulling their old "We'll give you a fresh start with a new card" line of BS, eh? I thought they'd put that to rest years ago.
DeleteBasically what this is is an effort to reinstate the SOL on the debt. They can't touch you once that SOL expires...but...if you agree to the new card its a win/win situation for them. You either pay off the debt you owe (win) or you default again but reset the SOL so they can sue you (win). And you rack up more interest charges and fees in the process (win). It's an ingenious scheme, but unless you know for a FACT that you will pay on time, every month, until the debt is paid in full, be wary of this one. Very wary.
Lee,
ReplyDeleteI have a $138 debt that is owned by a Collection Agency for unpaid Medical Charges. It was opened in 9/9/09 and last updated 11/30/09. Other than that my credit is spotless for about a decade. I don't plan on applying for any home loans in the next few years. Based on what I've read above, it might be best for me to just let it ride until 01/2016 (listed on credit report). Is it worth even trying to send a PFD note, or am I risking the chance of awakening the beast and getting a fresh update?
Hi Lee - I have two Questions:
ReplyDelete1.) My husband and I will be (hopefully) buying a home this summer but I have several medical bills in collections. Will this stop us from getting approved? (assuming of course everything else is in place...credit score, down payment, etc.)
2.) One of the medical debts I have is from pregnancy...usually when the doctor sees you throughout the pregnancy they bill one big bill when you deliver. Well the credit collection agency broke that bill down and put an entry on my report for each month. I know for certain this isn't how it was billed. Should I dispute those entries? Does it make sense to be charged one big chare vs. several entries for smaller amounts?
Thanks for your time,
JayC
Hi Lee, Great site. I have an outstanding out-of-state traffic ticket (does not show up on driving record or Ins.) which has since been sold to a CA. The CA is not registered as a licensed Debt Collector in my state [Mass], according to Mass Gen. Laws, they are legally not allowed to collect from me. They have reported this the Credit Bureaus. What's the best way to remedy this?
ReplyDeleteHi Lee,
ReplyDeleteI recently checked my credit scores and noticed a collection for a $525.00 medical bill reported to TransUnion (but not the other 2 bureaus). In a stupid panic I contacted the CA, negotiated a settlement and paid for a little more than half of the total bill. They said it takes 30-60 days to update to paid status on my report, but this was of course before I knew about PFDs and written letters so on and so on. The main problem I have with this is that the bill first went 180 days delinquent in Spring of 2009 and it just showed up on my TransUnion report end of 24 February 2012! What are my chances of having this entry deleted from my report by TransUnion after it updates to 'paid' with a 0 balance?
Thanks
Tony
Lee I just sent a PFD letter to National Credit Systems, there are two accounts (both posted to my credit report on (12/1/2007). The total amount owed on the two accounts is $3530, I offered a settlement of $2500. I have had credit problems in the past and been hassled constantly, but never by NCS, I would have never known the debt existed unless I pulled my own credit report. I tried to dispute it but it turns out to be from an apartment I lived in during 2003, I left for a job transfer and never got my name of the lease, my fault. Any chance they agree to the PFD given the length of time and what seems to be a complete lack of interest to make any attempt to collect this deb?
ReplyDeleteHi Lee,
ReplyDeleteI have one item in collections ($250 with comcast) I wrote to the CA (Credit Collections Services) asking for a PFD. They replied back " Your account has been closed with this office and returned to your creditor. We have instructed the credit bureaus to delete the account" What does this mean? Do I now write to comcast for a PFD or wait to see if all info regrading the account is deleted? Do I ask Comcast to validate the debt? Or will the account be resold to another agency? My credit score is around 700 and i really think removing this one item will help tremendously. Thanks so much.
Demond
Hey Lee
ReplyDeleteI tried to send this before but it did not look like it went through. My question is about getting negative information deleted by paying more than I owe. This is probably a longshot, but I thought it might be worth a try. For example, I have a ca that says they won't delete my negative collection even if I pay them in full. What if I send them a restricted endorsement check along with a letter stating that I am offering them $400 dollars if they remove the negative listing from my credit. The actual amount owed is $200. If they cash this are they obligated to follow the restrictive endorsement? Or will they just cash the check and send me a check back for $200.? My thinking is if they cashed the check to get their money I might have grounds to take them to small claims court for not following the agreement. One other thought was to have a 3rd party send them the money on my behalf with the same restrictive endorsement, however this time saying that if they don't agree just send the money back as the 3rd party is not obligated to pay anything and if the check is cashed with no action on the part of the ca the 3rd party could sue. Let me know what you think. Thanks
Michael
Hi Lee,
ReplyDeleteI had a couple items in collection that I paid off; 5 credits cards totalled about $3000 and a few medical bills. As of december 2011, my equifax score was 590. Now, since I paid off all my debt ( the most recent one was paid 3 weeks ago), do you think I would be qualified for a new car loan with such credit # and negative info on my credit report?
Hi Lee,
ReplyDeleteThanks for taking the time to answer so many people's questions. I've found a lot of reassuring information on your blog, but my situation feels different enough from the specific circumstances in other folks' questions that I want to make sure I know what the right approach is.
A $65 unpaid electric bill from sometime in 2006 went into collections in my ex-girlfriend's name. My name was the 'alternate' on the electric bill's account (which is now closed), but early in 2006 I moved out of the apartment where the account was active; I'm not really sure if the unpaid bill is from before or after I moved out. In any case the derogatory mark appears on my credit report (and hers as well, I presume) even though it's listed as 'her' debt, and I'm kicking myself for not getting my name removed from the account before it was closed!
Anyway I'm wondering what the best approach is here. I'm hoping to buy a house later this year and it'd be nice if I could get rid of the derogatory mark but the collections agency verbally declined the possibility of a pay-for-delete agreement, as well as ignoring one letter requesting the same. I also explained the circumstances to the electric company and got some sympathy but an apologetic "the debt is too old, there's nothing we can do" explanation.
My question is this: If I get the aforementioned ex-girlfriend, as the primary person on the hook for this issue to pay the collections agency, can I then dispute the derogatory mark with the credit bureaus as "not my debt" and expect the collections agency to let it get deleted from my credit report, or is that just wishful thinking?
Past that all I can think of to do is wait for the credit reporting time limit and keep pushing by certified mail to get a pay-for-delete agreement, but I'm not optimistic given what you've outlined in this blog post. What do you think?
Thanks in advance...
- Patrick
get a money order. Put your ex's name and address on it. Pay the collection Agency. Wait 2 months then dispute that the debt was never yours.
DeleteThis is not advise this is what I would do.
Hi Lee,
ReplyDeleteThanks for this site, very informative!
I had an old unpid balance from Citibank from 2006 for $3800 that I negotiated a settlement with them for $2100 (via phone) and paid with a certified check issued by my title co. when I re-financed. Fast forward to 2009 I started getting collection letters from an attorney for the full amount. I called and wrote to them that this acct. was settled in2006, but they persued a judgement on my credit report. Furthermore, they contacted my then employer for garnishment. I contacted an atty for help, and he contacted them stating a violation of the "Fair Debt Collections Act" They subsequently have agreed to remove the judgement after much back & forth and admitting that Citi had indeed agreed to the lesser settlement. This has been going on for almost 1 year, and I am also asking that the account be flagged as "paid in full". Should I also be asking for it to be deleted from my report? I don't think that just having the judgement removed is enough. Oh, and yes, they have agreed to pay me damages of $1,000. Your thoughts are appreciated!
Nationwide presenceo of debt collection companies is a bonus for people across any country.Same goes with the license.A collection company should be licensed in the state which it is operating in. It should possess the Federal law approvals for debt collection.
ReplyDeleteLee- I am 26 years old, have never opened a credit card account, and currently have one active federal student loan. I have 3 debts (all medical) totaling $323. I have varying credit scores from the bureaus, lowest being 569 and highest 611. My first question is - Why are all three giving me different scores? Secondly - I plan to pay off the debt in the coming month. Should I attempt a "pay for delete"? Thirdly, once the debt is paid, how long should I wait to apply for a loan/credit card? I have never had a desire to own a credit card, as I feel more secure using $ straight out of my checking account. However, if using a credit card will raise my score, I am willing to get one. My goal is to apply for an auto loan in the next 6 months. Any advice is greatly appreciated!
ReplyDeleteLee I have an account I just found out about that went into collections for $160.00 from Kay Jewelers in 2008. I had to call two collection agencies to get to the one who now owned my debt. I talked to them and they are willing to do a PFD, but on my credit report it's listed as Kay Jewelers, and under creditor's statement it says: purchased by another lender. I'm just worried that the CA doesn't have the power to remove this. Even though it says Kay Jewelers, if I get the CA to sign a PFD will the record be removed from the credit reports?
ReplyDeleteLee-
ReplyDeleteGreat site! I would like to comment on the belief that paying off collections/charge offs does not raise your credit score...as to my personal situation, I have recently been doing just that, paying off collections and charge offs on my credit reports (going thru a divorce and that is how they ended up there to begin with). Anyway, my score at TU has raised 100 pts in 1 and half months, EX 73pts and Eq 49pts paying off old debts. The reason it has raised my score is that I have now lowered my debt to income ratio. As you can see from my scores (raise), the actual impact that paying the debt off has had has varied from bureau to bureau but never the less, it has had a positive impact. When I first started this 3 months ago, I first did pay for deletion and was successful with several companies. My scores of course jumped up quite a bit as each item was deleted - and initial jump of 75 pts per bureau. But the increase I mentioned above has happened just since Feb when I paid the others off who refused to do PFD and each of them are showing "Paid in Settlement for less than full amount owed, Zero balance...
Credit reporting agencies don't know your income, so your debt-to-income ratio is *not* part of FICO calculations. Total amount of debt outstanding, however is.
DeleteHi Lee,
ReplyDeleteHere's an odd situation. I have an old Cable bill that went into collections in mid-2009. The original amount is $85 but the collection agency is reporting the debt as $105, after they tacked on an additional $20 for collection fee. I am currently waiting on a response to the letter I sent to the CA for a PFD.
I was pre-approved for a home loan but the rate was a bit high. I have about 5 months to improve my score so that when I close on the house, and they pull my score again, I can hopefully get a better mortgage rate. This all started a month ago when I called the CA and asked for a PFD verbally. He said only supervisors could authorize those, but once the supervisor got on the phone she declined that she could do this. She said to contact the OC. So... I called OC and they couldn't find any detail on my account beyond a name and the original amount. They couldn't even verify the address I lived at during that time or anything, and this was a cable bill, so the least they should have is the address. Even a manager got on the phone and apologized for not being able to find any info. He stated that "this was very bizarre" and that since they couldn't find any info that I should call the CA again because they are the only one that can provide a PFD.
My question is two-fold:
1-What should I do about the fact that the original debt was only $85 (less than $100 which would normally not be reported based on FICO08), yet the CA reports the amount on my credit reports as $105? No place does it reference that the original debt is less than $100. If it did, I'm assuming the affect on my credit would be almost non-existant. Should I contact the CA and ask them to update the way they report my debt in order to show the original amount is less than $100? Keep in mind I also have a PFD letter en route to them as well.
2-Do I have options with the OC considering they couldn't really provide any info? I would like this off my credit report and I could obviously pay the darn thing but in the short term that would hurt more than help.
Suggestions?
hi lee, short story time. bought house in 07 laid off in 08. i have 5 debts i have unpaid. 1.) reliant (elec. company) $507.75 2.) at/t actual $1209.57 settlement $604.79 3.) Direct TV $ 373.33 willing to take 4 equal payment 4.) chase bank account $ 118.93 5.) amegy $280.00. the last two are bank accounts and i have my EQUIFAX credit report and it says that only reliant is the only unpaid debt i have on it giving me a credit score of 596. the big thing that got me was i was also 180 days delinquent on my house and had a loan modification that is PAYS AS AGREED now, going to sell to my brother in NOV. i also have a $300 paid charge off (2009) and a credit card that was 60 days delinquent that is now PAID AND CLOSED(2009). reliant is the only UNPAID (reported 2011, actually happened in 2008) i have on my report. how should i tackle these debts? i would like to get at least a 680 credit score ASAP! any help would be much appreciated, thanks
ReplyDeleteHi Lee,
ReplyDeleteI love this blog and I really appreciate all the time you spend helping people in financial need. Your information is real and your "no bones about it" take on credit repair is refreshing among all the misinformation that you find all over the net.
Here is my situation. I have some student debt that I defaulted on fresh out of college; all-in-all about $15,000. I went through a rehabbing process where I made payments of almost $500 for 10 months to rehabilitate. When I entered this agreement they told me that when I completed the process that I'd have new loans, in good standing with the Dept of Ed.(I do!) and that all the collection accounts created by my defaulting would be deleted (they have not yet been deleted, and it's been almost a year long fight). I could go on forever about this as I have gotten the full spectrum of responses from them, (from "yes sir I'll make the request to the CB's right now" (I have a letter from them saying that the request has been made, good ammo to send to the CB's perhaps?) all the way to "we are not responsible for that") but at last phone call I talked to a supervisor and he told me that "I was right" and that he would "see to it that my request was expedited". He also said that "You are absolutely right, there is no reason why this should still be on your CR". Fingers crossed, toes crossed, eyes crossed.
Also, I have a medical collection for $323 that went into collections in 2010. I was fighting insurance about coverage and I neglected to stay in communication with the debtor and into collections it went. Very stupid move on my part. I think my only hope with this one is that the collection agency is just on a contract and does not own the debt outright. If so I may be able to pay the doctor's office directly in exchange for them pulling it out of collections. Is this possible?
I also have a collection account that apparently originated from HSBC for about $325 and is now up to almost $1000. This debt I have absolutely no recollection of. I have a store account with Best Buy through HSBC that I never use but it is in good standing. Should I dispute this account? Should I call the collection agency and see if they can get me some info on what the debt originated from or should I just let it lie? Should I try a PFD? I know paying collections does nothing so I'm at a bit of a loss.
All other accounts on my CR are "pays account as agreed" so I'm hoping that I can take an active role in cleaning this mess up.
Thanks again for all your time and help.
Hi Lee. I have a charge off with Citibank and it has gone to collections. The org amount is $6k. I called the collection agency and they offered me $1660 to settle the account but will not do a PFD. They will only report on my credit report that it has been settled as full. Should I pay it or wait it out a little bit and see if I can get it a little lower? I wanted to purchase a home but my FICO score is REALLY low.
ReplyDeleteHello Lee,
ReplyDeleteI am trying to fix my credit and have been successful at getting a couple of my debts removed from my credit report after settling. I would like to know what is the best way for someone like me who has a lot of paid collection accounts on their report to start rebuilding their credit if they I don't really want to buy anything else on credit for a while?
Hello Lee,
ReplyDeleteI am trying to fix my credit and have been successful at getting a couple of my debts removed from my credit report after settling. I would like to know what is the best way for someone like me who has a lot of paid collection accounts on their report to start rebuilding their credit if they I don't really want to buy anything else on credit for a while?
Lee,
ReplyDeleteLet me start by saying you are very much good people for doing all you do to inform people like me. I have a bill from a CA for $3,500 with a date-of-1st-delinquency of a year ago, February, 2011. The OC was a medical bill associated with the fallout suffered from an hit-and-run. Unfortunately, as the police (though called) never showed, I have no police report to show as proof that I did not incur this debt on myself willingly. I paid all other debts associated with this injury, but this one slipped through the cracks when I moved last year. I honestly forgot about it.
Now, from what I've seen I believe that the OC still owns the debt. I got this from a blurb on the CA's website, which states that they operate on a "contingency basis"
If this debt was smaller, I'd consider just riding out the SOL. However, this account is currently giving the business to my credit utilization ratio, and I'd like to buy a house sometime in the next few years. I'd shoot for a PFD, but that seems dangerous with so much time left on the SOL (Oregon, 6 years total.) What advice can you offer me?
Lee,
ReplyDeleteMy wife and I are looking at buying a new house and so I have been paying off old debts so that the mortgage will be more willing to approve us. My credit score is very poor but my wife's is very good. I'm also paying off the debts because I'm simply tired of my past, (college), mistakes still bothering me.
My question is how do I improve my credit score now? What are the best options?
Hi Lee,
ReplyDeleteI just found your site and hoped you could answer a question for me. I have been working hard to fix my credit after some financial issues about 7 years ago. I have been very diligent with paying my bills and watching my credit and things are improving significantly (I have also had some success getting negative items removed with DV letters). I asked for a pay to delete letter on a $100 medical bill that went to a CA in 2007. I sent it certified, offered the full amount without acknowledging the debt. I have received no reply from them (I have received the receipt that they accepted the letter), however the CA did re-report the account and I believe re-aged it to April 2012. I know this is illegal and I have written another letter requesting they remove the account and citing several FCRA/FDCPA violations. Since it is a zombie debt I hoped to get it removed from my CR if they again refuse to validate. I am not sure if I am approaching this right, any advice?
Thanks!
Lee.
ReplyDeleteInstead of a pay to delete I was wondering if it was a good idea to possibly get the collection agency to change the debt amount shown on a credit report to a amount less than $100 and paid in full (since nothing under $100 affects a credit score) but pay the collection agency the original amount. What do you think?
Hello Lee,
ReplyDeleteI am glad that i came across this blog but i fear it might be a little too late... I owed one collection agency (Equiable ascent Finance)since Nov 2011 an amount of $1708 which has been raised to 2100 now and another creditor an amount of 1776.00 since may 2011.. both accounts charged off. I read this long thread about PFD death and fear i made a mistake by calling the creditors for a Paid-in-full for deletion and letting them know i can pay the amount .. EFA Collectors have agreed to give me in writing an agreement for PFD.. but after reading this thread i realised that this offer might have been made in an attempt to be certain that i am able to pay the debt in full and use it to sue me as there is a huge SOL period left.. Do you think my fears are on merit or have you heard of Equiable Ascent Finance agreeing for PFD before..??? I'd really appreciate an answer.. I see you'r not replying to other threads . i hope everything is fine at your end .. keep smiling n keep doing this great job.
Shabir
Hi Lee,
ReplyDeleteThank you so much for your insight on credit. I am hoping you can give me some advice on my situation. I have two credit cards that were originally opened many years ago when I lived in FL. Last year I moved to NY and found myself in some financial difficulties and both of my accounts (Citi and Chase) got sent to collections. Due to these two credit cards I received letters from other lenders stating my accounts with them were being closed due to a change in my credit report status (these were accounts that were open but had zero balance/good standing status). I owe approximately 4k for each and was thinking I should try to get a PFD due to the amount I owe. But if I don't get the PFD, do you think its worth it for me to pay off the debts since it is so new or should I not pay anything and tough it out for the next 6 years? I'm really starting to believe that it's better for me to focus on establishing a current account that will reflect good payment history instead of paying these two debts. Any advice would be greatly appreciated! I just pulled up my credit score yesterday and it is a 603. Thanks for your help!
Wells Fargo has been the only company so far i've been able to negotiate with. I had already paid the balance off and then wrote to them after and sent them a "goodwill" letter stating that I had been a good client and that it was not my intention to default on the loan, etc. Told them that I would be applying for an auto loan soon and that I was afraid that this negative mark on my credit report would hurt my chances of being approved. 2 weeks later, I received a letter back saying that they would be happy to. And then 30 days later when I ran my credit again, it was gone! =)And the balance I had paid was only about $700.
ReplyDeleteHello,
ReplyDeleteI just found this great blog and am not sure if people are still checking out comments, but I was looking for some advice on our current situation. I have a credit score of 770, but my wife's is 620 due to outstanding medical debt from before our marriage. She has no credit card debt. She recently negotiated a 30% discount on a $1800 account, not knowing that doing so does not improve credit. Because the CAs for three other accounts (totalling another $1500) were very rude and refused to reduce the amount at all, she did not pay. She asked one about pay-for-delete, and the rep lied, saying it was "illegal."
What is our best course of action? We are in our late 20s and would like to buy a house someday. Do we send letters requesting PFDs or just ignore the debt? Most of it expires in about 4 years.
Never found such informative articles
ReplyDeletefree 3 credit report
Hey Lee,
ReplyDeleteThanks for the info it is very useful. My husband and I are trying to purchase a house, yet he has 3 items on his credit report that are in dispute. I called today to settle the date for less and have a bad feeling that was not the right thing to do.
Also I have 2 student loans that are in good standard and 4 other accounts that have been paid in full. Some of those account where paid for less but all of them are paid off. Is there a way I can get these items removed from my credit since I've already paid them.
Please help us, Not realizing the severity of credit at a young age has really put us in a whole now.....
Thanks in advance for the reply.
Hi Lee
ReplyDeleteMy name is Azizi,I think my question is quite simple, but I still need many answers. I'm in the process of trying to contact CA and sending PFD. My question is if they don't agree with the PFD and I settle the amount would this hurt my credit or help it because it paid?
Pretty easy solution and a way to make money in the process. Never mention pay for delete and offer a non disclosure agreement with a liquidated damages clause and affecting both parties.
ReplyDeleteWhat could be better for the agency. They get paid, they don't have to delete, and now you can't go tell all your friends you got 50% off, or whatever.
Wait until the check clears and then dispute their entry on your credit. If they break the NDA you sue them for violating the NDA as they provided information about your account when they signed they would not discuss your account unless ordered by a court or for tax purposes. They had to "discuss" your account to verify the dispute.
Then you have leverage. Work in part of the settlement a deletion from your credit report in lieu of say 1/2 the liquidated damages, or even all if it is huge deal to get removed.
If they don't answer the dispute in an effort to not violate the NDA, after 30 days, the account has to be removed due to no response by the party you disputed.
Of course for those really small accounts you will probably run into them not wanting to go to the trouble for such a small amount. However, if you draft the NDA and send it to them with a stamped envelope there is a ton better chance if they just have to sign their name and drop it in the mail.
hi Lee,
ReplyDeleteI need some advice. So I recently found out that i have 2 medical bills from 2007 that have gone to collections. The total of these two are a little less than $1,000. The SOL is 2014. I have 2 more years till its off my credit report. For the past 5 years, I have been abroad for 3 years and out of state for 2 years. I just graduated from grad school and never bothered to check my credit report till now. That is when I realized I had 2 bills from 2007 that went to collections. For the past few years, I have never had any phone calls or mail from a collections agency for these bills.
Based on my values, I feel that I should pay for these bills ASAP. However, Im a bit confused about the SOL and how to go about. I want to pay this bill off, and see these items off of my credit report but Im afraid that if I contact the collections agency regarding these bills that the SOL will restart again.
Is this the case?
Do I have any disadvantages if I go and pay off these bills? (besides loosing $1,000 from my pockets).
Last thing I want is more debt being collected from the agency or a law suit a year from now.
Thank you for your help!
M
I dont know where you live, but there is a real good chance that the statue of limitations has run and no one has a legal standing on the bill.. they post it to upset you, but if you send them letters to have them validate it with THE ORIGINAL documents, and they cant..... then they have to have the item removed from the report. Its a game. Dont pay it..
DeleteLee, I don't know if you're still giving advice, but my credit is HORRIBLE and I have a bunch of collection accounts. A couple of the collection accounts say "PAID COLLECTIONS". Most of the delinquencies are $100-$300. I want to get my act together and buy a home. How can I get these off my credit report? I also have a gov't tax lien. What are my options as far as the tax lien is concerned too? I NEED HELP AND GUIDANCE!
ReplyDeleteStart by contacting a community college, or get a quicken program and list all of your bills.. List YOU as a bill to pay, and you are first. Take 10% -15% off the top and pay YOU.. put it in a savings account AND DONT TOUCH IT.
DeleteWith the remaining funds, map out your bill... house, kids, medical, cars, credit cards, and misc. Under each category list your expenses.. like house.... mortgage, rent, electric, gas, water, cable, etc... for kids, list school, after school, etc... and the sub categories go on... Do this on paper a Computer is great, but paper is more flexible.
List all of your payments due, and then subtract what you have left after you have paid yourself.. subtract the bills due, and see what you have left for food, spending, etc. and the less you put on credit cards, the more you have to spend, cause you are not paying interest.
That is where to start.. Once you do that... go to credtinfocenter.com, and read the sample letters... get your credit report and follow the instructions in the examples and you will see that things will come off, you just have to be really proactive and once every two months, take an hour or so to do what has to be done, send it our return receipt requested, and while it will take some time, you can chip away at the creditors.
I did not have a bad credit score. I just had a situation where I had a small problem, and the solution made it far worse... and maybe because the original creditor is the reporter, if it was a collection agency, it might have been easier.
As I help people.. I have found it is pretty easy to reduce a collection agency. They violate laws all day long.
I hope this helps you. Best Wishes.
Thanks Anonymous. I will give it the good ole college try. I appreciate the help.
DeleteAnonymous is 100% right about creditinfocenter.com. One thing I want to add: Read through the section on disputing information thoroughly. The standard "dispute till its gone" method just doesn't work like it used to. And check the age on your paid collections. Too often collection accounts that should have been removed a long time ago hang around on credit reports. I'm sorry I didn't get back to you, but lately I've been logging in and seeing dozens of comments each day. I just don't have time to get to them all. I wish I did. Best of luck.
DeleteI would pay the tax lien first. You can't get a home if you have a tax lien. if you do have A home the may have the right to force a sale.
DeleteI was in a horrific auto accident about 500 miles from home. I had to use my credit card, but without a cent of income for 3 years, I had to let the payments go and I WAS THE ONE TO CONTACT the credit card and tell them. As I tried to work with them, they just laughed and played games. I did not think it was very funny. When the case settled, but not for the value as $100K was on a fraction of the costs incurred, my attorney settled with them on the sum.. and they were to list it as Paid as Agreed.. WRONG! They said it was a partial payment. They listed the sums written off far greater than what I received. and now they are re-dating the date for another 5 years when it is suppose according to earlier reports come off in 2013.... It is the only negative on my credit report and every time I complain it gets worse.
ReplyDeleteThe bill that we never could contact came off,the statue of limitations ran on it, and it is gone.
My point is DONT PAY TO DELETE.. it is a joke and the joke is on you. I have taken the company to court... that produced nothing. I know that there is a way to get this material off.. and I am going to try one more time.. if it doesnt work, while I dont like them very much, I might have to go to Lexington Law cause they do get results. I just hate having to pay so much money.
My credit score is 749.... so this pay for delete has costs me about 90-100 points.
I rather doubt your credit score would go up more than 20-30 points. No one has a FICO above 840. No one. Perfectly clean reports with 20+ years of history typically have FICOs in the 760-800 range.
DeleteHi Lee, i had a jc penny credit card that i believe is through GE money bank for a suit i bought for a wedding that was about $150. I paid on time for 7 months then fell into finacial trouble even though it was such a small debt. When i found out it was reported 90 days i started paying monthy again but the late charges had brought it up from 30 dollars to 300+. its now down to $141. I have an auto loan, other credit card and never missed a payment on anything but because i have little credit history this is crushing my score im 26 and trying to build credit to buy a home. Do you think a PFD will work for me? Has anyone worked with GE before? If i can get this removed my score would jump atleast 100 points. I dont even know where to start..
ReplyDeleteIt never hurts to try. My guess, however, is that since you've already been making payments on the debt and have paid it down significantly the company isn't likely to jump on your PFD. While paid collections are just as bed for your credit score as unpaid collections, collection accounts under $100 have a much lower negative effect on your credit than those over $100. The impact is so low that some sources claim that collections under $100 don't adversely affect your scores at all (we have no way of knowing for sure since the FICO formula is secret).
DeleteIt's up to you how you want to play this one. If it were me, I'd focus on paying the debt down below $100 and see how that affected my score. Keep in mind it may take a month or two for the company to update your credit report and for the changes to your score to take effect.
Plus, provided you pay your current creditors, the debt will have less of an impact as time goes by. The credit bureaus have to remove the entry 7.5 years from the date your ORIGINAL account first went delinquent. The older an entry is, the less it influences your score. Paying the debt down below $100 and the simple passage of time are your best friends in this scenario. Best of luck to you.
Hey lee its me again, you just answered my post above this one.. i have a little update. On my report the jc penny card is listed as GECRB/jcp potentially negative/closed. So its not charged off probably because iv continued to pay on it. the bad derogs are 30,60,90,90,90 all in a row. Do you think a goodwill letter would be better in this situation over a pfd? and what are the chances if i just pay it all off that they delete the thing entirely? does that ever happen?
DeleteUnfortunately a goodwill letter isn't likely to do you much good if the account has already been closed. The whole premise behind the goodwill letter is to convince the creditor to delete a negative entry because you are a good customer. Goodwill letters are designed for a single slip-up. What would work for a single 30-day late notation isn't going to work for five late payment notations in a row. Even if it were only one late payment, the company wouldn't be likely to adjust a closed account. Heck, its like pulling teeth to get credit card companies to fix negative information that's legitimately wrong.
ReplyDeletePaying it off will cause the account to show up as "paid," but it won't vanish from your account just because you paid it. Once the negative entries are at least two years old you might have a better shot at getting approved for a mortgage. If you absolutely, positively have to have these negatives removed NOW, pony up the cash for an attorney. Although the negatives are legitimate, that doesn't mean that a few well-placed letters from a lawyer won't result in the credit card company cleaning up its reports just to avoid a legal hassle.
Hello,
ReplyDeleteI APOLOGIZE IN ADVANCE FOR THIS VERY LONG POST!!I have some pretty bad credit history, but I am finally able to start putting things back in order. (Long story.. thank you if you are still reading) Unemployment, job loss etc. found my husband and I filing for bankruptcy in 2010. Right after we were able to start establishing new credit. Unfortunately - this also coincided with my husband getting laid off (ANOTHER JOB LOSS) and my EX deciding to stop paying child support (we are in court for this) So we suffered a $3500/mo loss of income in 2012! (2012 has not been a good year)
Fast forward. we have several small credit card accounts-(around 400-800 each) some are 60d, 90d past due, some are charged off. One is past due but I am making payments and they have agreed to re-age my account. My goals is to be able to qualify for a mortgage in 2 years. So please tell me what is the best way to go about this.
1) Pay in full- send a good will letter and hope for the best?
2) Settle and ask for a pay for deletion?
3) Let these finish charging off, wait 18 months and then dispute- hoping they will be removed?
4) a combination of the above tactics?
The credit card companies are: Capitol One, HSBC/Orchard Bank, First Premier and First National.
Thank you for reading this very long post and thank you in advance for any advice.
Goodwill letters (when they work) are a way of saying "I've been a great customer in the past, because of my good history please erase this one little slip-up." I don't think a goodwill letter would do much good in your case because you aren't a longstanding customer and if you have 60 and 90 day lates then you've got more than a single slip-up. Credit card companies aren't going to repair extensive credit damage just to be nice. Plus, you mentioned one of the accounts was charged off. A credit card company has no cause to make a goodwill adjustment on a closed account.
ReplyDeleteYour goal right now should be to keep collection agencies off your credit report and pay down these balances pronto. In other words, don't let them charge off if you can help it. Not only will that result in your debts going to collections, you'll lose the spending limit on the cards. That will lower your credit utilization ratio and hurt your credit score even worse. Plus, you won't be able to get another credit card anytime soon, and you're going to need one to rebuild your credit if you plan on buying a house within the next few years. Don't settle. When you settle, the balance could STILL go to a collection agency and they're going to ding your credit report and viciously pursue you for the balance plus fees and interest. In the long run, you can end up paying more.
Your balances on each of those cards should not exceed 10% of the spending limit. Make paying down your balances to that point your immediate goal. Don't cancel the cards if you can help it. Yes, the interest rates are astronomical because of the missed payments, but if you pay on time for a year the CARD Act states that each company has to restore your original interest rate.
Long story short, your odds of getting these late payment notations off your credit report are slim to none. Right now, you just need to be doing damage control and preventing the situation from getting worse. If you were to wait 18 months and dispute after a charge off, there's no guarantee it would work. If you don't allow the accounts to charge off, however, a dispute is almost certain to fail since your account is still open and the information is still readily accessible to the company. It's up to you to decide whether you want to take the chance letting these accounts charge off just so you can try to dispute them later or pick yourself up, dust yourself off and do the best you can credit-wise from this point forward. Best of luck to you.
Questions/Options: My credit score is low: 566. In short because of single parent life, death of only living relative/mother 12 years ago forced me to file bankruptcy (no longer on CR). Now that my son is 18 and working and I have now saved extra money and I want to try and do any damage repair I can but I don’t know where to start.
ReplyDeleteI live in PA were the SOL is 4 years so: # 1~2; 3~4; and 5~6 below are all past the SOL and to the best of my knowledge I did not contact any of the CA for any of the accounts.
I have “nine” negative accounts on my credit report/Some are duplicates:
1.Capital one: charged off – last payment 4/2006 Charge of balance: $686
2.LVNV Funding: Collection agency for above Cap One: balance $917
a.Should I bide my time till it falls off my report?
3.Household Credit Service:charged off-last payment 12/2006 Charge of balance: $998
4.Security Credit Service: I “think” is for Collection for above Household but only shows balance due of $980 but I also recently received in the mail one of those fresh start we will give you a new credit card if you transfer the balance of $1404
a.I don’t know where to start with this one…?
5.Capital one: charged off - last payment 1/2007 Charge of balance: $655
6.Asset Acceptance: Collection agency for above Cap One: balance: $1,258
a.Not sure …try to pay off, bide my time or try PFD.
7.Convergent Outsourcing Collections Cable TV – from 2010 Balance $321
a.Just pay off in two to three months?
8.Current car- have been paying on it for over 5 years; approx. one more year to go; missed a month and now negative because now multiple-many months I was 30 days past due…basically I am always paying one month behind.
a.Pay a double month to have each consecutive month on time?
** I believe #8 should be my first priority with using saved money then, take rest of money and pay off #7
9.US Dept of Edu- Student Loans
a.Keep paying currently and increase payments
I have a couple of medical bills that are in collections but not showing up on my credit report. I plan to pay them both off within the next few weeks. Will this flag them to report that it was previously in collections? Should I expect that paying these debts will cause my score to go down or should I contact the company directly, first?
ReplyDeleteThank you for your help!
Amy
Contact the company (its better if you can do this in person) and explain the situation. Ask for a simple statement from them, in writing, that these debts will not be reported to the credit bureaus after they receive payment. Pay the bill then request a zero balance statement reflecting that the account was paid in full. Its unlikely that it will show up on your credit report after you pay it because being "in collections" with a hospital is NOT the same thing as being sent to a collection agency. Just in case, however, these written statements will help you get it removed.
DeleteAnd just for reference, I ask for a zero balance statement every time I pay a medical bill, even if the bill was never late. Medical record keepers are sloppy. Keep your own records to protect yourself.
Hi Lee,
ReplyDeleteI have recently contacted mycreditgroup.com for credit repair services. I have good standing accounts on my credit reports, but I also have accounts that are in bad standing as well. During the consult I was told that getting the incorrect spellings and incorrect addresses off of my report may help, does that improve my score? Do you think that this would be beneficial to my FICO score?
I owe Macy's from 2010 for $214,i knew nothing about it,because i asked for the account to be closed in 2004,but it was never closed.They kept the account open and it left me with a 90 day status of being late and a charge off.Macys sold my account to a collection agency in 2010,and i have been negotiating with the collection agency for several years,that i would pay them the $214,if they can remove the debt from my credit,but they refuse.Should i just not pay the amount,since it will still cause a negative affect on my account,or if i pay it,even though it shows as a bad debt collection,it may help in my favor that i payed it off.Please help :)
ReplyDeleteHi, Lee
ReplyDeletePlease help me! I'm 20 years old, and as of 8/14 my credit was a 708, it has dropped within 15 days to a 588 due to a "potentially negative" file on my credit report which is a $200.00 hospital bill i feel i do not owe. It has shown up on two of my credit reports and I have started a online dispute with one of them as of today. how do i get this removed from my credit report completely? I feel as if I am not responsible for the bill because I did have insurance at the time. Do I contact the hospital first or insurance company. How do I prove this is not my responsibility and get it removed asap. This is driving me nuts. Please Help. Thank You!!!!
Hi Lee,
ReplyDeleteFirst of all THANK YOU so much for taking the time to answer and provide a wealth of info. Like so many others my husband and I fell on hard times and not really knowing what to do or who to turn to we just buried our heads in the sand and wished for things to go away. Well of course reality hit. My husband was served papers to appear in court regarding a lawsuit from CA regarding an outstanding credit card bill with First National Bank for $3259. He went to the hearing, the judge ordered him and others in court that day to settle with the attorney. Attorney asked for $2500, husband agreed and was told to call CA to make payment arrangements. Once husband got home told me situation, I told him to call back and ask for lower amount and ask for removal of the record removing from credit report (It appears as Public Record with date file in 2011 and also under Collection account date opened 2010 ans scheduled to show continue on record until Sep 2005). He got them down to $2000 if we pay by 9/7 and they said they were not able to delete from credit report. We got settlement offer letter in the mail for the $2000 and that the account would be resolved as settlement in full. I then faxed a pay to delete letter stating that we agree to pay the $2000 (didn’t want to risk the chance they would go back to the original amount). The CA sent another letter in the mail saying that would not negogiate on the offer and that they offered a $1200 savings and if we didn’t pay he would be in default. They did not mention anything about the delete which is what I want more than anything. I have 3 days to do something…should I send another fax asking them to delete or change status to paid in full or just not do anything. We are already in a mess with one other credit card fiasco which turned into a garnishment of $4000 from joint savings account (all we had). I don’t want to hog up the board with that…but it is Chase Mastercard for $16000. Husband did not go to hearing on that one last year(urggh), so CA got default judgement. Called our bank funds still be held and it’s been 2 months already since they garnished the account.. Gonna complete a motion to vacate judgement and see if the CA will settle on that...not sure how we can come with $ to settle or if bank releases funds I will ask to settle for paid in full…but I don’t even know where to begin. Sorry to hit you with 2 scenarios at once…if you can provide guidance to one or both will definitely appreciate your thoughts. God bless!
Hi Lee,
ReplyDeleteI have a medical bill that I will not afford to pay fully until I get my tax return next year. Which is better for my credit: settling the debt for less and paying it off now, or waiting six months and paying it in full? Can I request a settlement for a "paid" status on my report?
Thank you for your input!
Amy
Lee
ReplyDeleteI have two accounts that have bounced around from CA to CA. Each time I have been able to get them deleted from my credit reports but these two keep showing up from another CA after it is sold.
What should I do? One amount is 700 and the other is 500.
Hi Lee,
ReplyDeleteYou are an Angel.
I have 3 'dings' (all in collections) on my credit report.
Question A: The first ding lists "Date of 1st Delinquency" as 01/2006. How do I find out when the original account went 180 days delinquent (as opposed to the date listed by collection agency on my credit report)?
Question B: The other two (one for $510, the other for $780) I would like to take care of now (with the aim of improving my credit score). What is the best course of action?
Big great thanks and hope you get yours. :)
Hi Lee,
ReplyDeleteYou are an Angel.
I have 3 'dings' (all in collections) on my credit report.
Question A: The first ding lists "Date of 1st Delinquency" as 01/2006. How do I find out when the original account went 180 days delinquent (as opposed to the date listed by collection agency on my credit report)?
Question B: The other two (one for $510, the other for $780) I would like to take care of now (with the aim of improving my credit score). What is the best course of action?
Big great thanks and hope you get yours. :)
Hello Lee,
ReplyDeleteI recently filed a dispute with 2 of the main Credit B. Well results for one came back. A couple things got deleted. Some says new information. A couple says "No longer on file"...and it is no where to be found on my updated credit report. My question is: is this statement of no longer on file something the CA uses to respond to a dispute so it won't be deleted? Can they come back and add this to my credit reports? Any information would help...
Thank you
Hello,
ReplyDeleteI recently disputed a few items from my report... The results were good. A few were deleted while a few came back no longer on file. I waited a couple of days and pulled my updated credit report and all of the deleted and no longer on files are off my credit report. What exactly is no longer on file... is this something they put to finish up by the invetigation date? If so, are they able to go back and put it back on my credit? If so, how long do they have? This credit stuff is serious buisness. I have 6 other accounts which remain. 2 are duplicates from when Chevron card sold it to LVNV Funding (CHEVRON SHOWS UP CLOSED) 2 will fall off July of next year- Drive time and the LVNV Funding (Chevron)1 is for $133 some DVD company; 1 is for $505 for Total card and one for $147 a utility fee. Would I be safer paying the 3 off (in collections) and letting the 2 fall off next year and dispute Chevron because it is a duplicate account? Any advice would be greatful...Thnx
Hello,
ReplyDeleteI recently disputed a few items from my report... The results were good. A few were deleted while a few came back no longer on file. I waited a couple of days and pulled my updated credit report and all of the deleted and no longer on files are off my credit report. What exactly is no longer on file... is this something they put to finish up by the investigation date? If so, are they able to go back and put it back on my credit? If so, how long do they have? This credit stuff is serious business. I have 6 other accounts which remain. 2 are duplicates from when Chevron card sold it to LVNV Funding (CHEVRON SHOWS UP CLOSED) 2 will fall off July of next year- Drive time and the LVNV Funding (Chevron)1 is for $133 some DVD company; 1 is for $505 for Total card and one for $147 a utility fee. Would I be safer paying the 3 off (in collections) and letting the 2 fall off next year and dispute Chevron because it is a duplicate account? Any advice would be grateful...Thnx
Hello,
ReplyDeleteI recently disputed a few items from my report... The results were good. A few were deleted while a few came back no longer on file. I waited a couple of days and pulled my updated credit report and all of the deleted and no longer on files are off my credit report. What exactly is no longer on file... is this something they put to finish up by the investigation date? If so, are they able to go back and put it back on my credit? If so, how long do they have? This credit stuff is serious business. I have 6 other accounts which remain. 2 are duplicates from when Chevron card sold it to LVNV Funding (CHEVRON SHOWS UP CLOSED) 2 will fall off July of next year- Drive time and the LVNV Funding (Chevron)1 is for $133 some DVD company; 1 is for $505 for Total card and one for $147 a utility fee. Would I be safer paying the 3 off (in collections) and letting the 2 fall off next year and dispute Chevron because it is a duplicate account? Any advice would be grateful...Thnx
Hi Lee, great blog you have here - always nice to see people discussing real problems with shared experiences. I have one question in regards to what you said about paying a collection not increasing your scores. Why is this the case? I think you mentioned in a comment from 02/2012 that owing collectors decreases scores, so wouldn't paying the balances INCREASE scores?
ReplyDeleteI'm a little confused to as why specifically there would be no increase in scores if you settled old debts that are past due.
Lee, I have a 4.5 year old $650 debt. In my state, the SOL has passed. I would really like to improve my credit and can offer at $400 as payment for this. However, if I contact the CA, does this reset the clock and will they start contacting me to pay it?
ReplyDeleteHi Lee,
ReplyDeleteI feel ignorant and scared and not sure what to do. I have been severely underemployed for over 4 years and have been falling behind on rent while trying to keep my credit cards out of collections. I live in California and here is my situation:
I had one Chase account that went to third party evil collections as of October 2010. I had been making monthly payments (but below the minimum payment they were demanding) until recently. Last payment was May 2012 and current balance due is $14,400. They haven't called to harass me and berate me for a few months now. Are they going to sue me now? What do I do? Should I try to talk to them? I could only offer them $100 a month at this point anyway.
A more urgent matter is that I have 3 Bank of America credit cards that went to their in-house collection agency, FIA card services, in July 2010. I had been making payments each month (although not in full and sometimes late). Two of them (balances are $19,400 and $9,600) fell so far behind (going to hit 6 months again) that they are going to charge them off this Friday to a third party collection agency unless I can make another payment. The third account (balance $5,500) is 5 months past due so they are not charging it off yet. What do I do?
Is it better just to file for bankruptcy? I am beyond broke. Ary advice would be greatly appreciated, thanks.
Lee,
ReplyDeleteI have 4 credit card accounts, all of which all have been in collections for over 18 months. Citi 15000, discover 5500, and 2 other smaller ones (12-1500ea), I think one is GE. I have recieved offers in the 30% range on all accounts, and have a current settlement negociation with discover for 20%, but they say they won't pfd.
I have 2 mortgages, which are now current, but were behind. And I have 2 smaller collection accounts 287 Dish network, and on for around 350. I now have a job that would allow me to pay everything in full, but I am stubborn. I want to improve my credit score in the most effective way. From the previous posts, am I to believe that unless I get a PFD, my credit score will not improve that much? My current score appears to be 598. I have been current on my mortgages and student loans for almost a year. I was told that the past 2 years credit history is the most important, so once I am current on my mortgage for 2 years, I may be able to qualify for a loan to get rental property. What is my best option for taking care of the credit cards? I have also heard that in your negociations, you can ask that they not report the 1099c to the IRS, this does seem a little far fetched. With the tax implications, for my situation, a 20% settlement, +50% taxes on the "forgiven" amount, I would still be paying around 60%, I would need a pfd to make it worth my while.
Hello,
ReplyDeleteNice thread. I'm looking for advice. I have a collection of just over $300 on my credit report that is otherwise squeaky clean. It's about 2 years old, and the original bill is over 4 years old. It was a medical bill that I wasn't liable for. My health insurance with two companies overlapped and both refused to pay, arguing the other was liable, and so I got stuck with the liability. At some point I got both insurance companies on the phone talking to each other and me, and thought we had it sorted out, but no... And so I got stuck with this and never felt I should pay.
Whatever. I've still got a FICO over 700, but this is still knocking 100 points off, which could make a real difference for my current situation. I've offered a PFD, but so far they refuse.
I've checked: I'm past the statute of limitations (3 years for a 4 year old debt), so, regardless of the insurance situation, I'm not legally liable for this.
Paying this debt will do nothing for my score unless they delete it.
Should I offer more than the amount due for a delete? It's worth it for me. I'm looking to take out a ridiculously large (super jumbo) mortgage.
Informed advice would be very welcome. Thank you.
I have a question. It may be off topic. I have an acct Cap 1 sold to another company. It's under $1000. I was trying to see if I could clean my report up because I want to buy a house. So they transferred me to the other company and they couldnt find my account. Spent like 30 mins repeating myself. Name, social,etc. Cap 1 said the other company updates my report but if they cant find my account what can i do????
ReplyDeleteI had a credit card from college and lost my job right after graduation and my balance is 6800 dollars. I finally have a new job and i'm in a position to pay a portion of my debt. is it wise to send a settlement offer/pfd to the collection agency or should i wait until they send me an offer? the sol doesnt expire until next year. i want to pay off this debt so i can move on with my life and eventually buy a house.
ReplyDeleteHello Lee,
ReplyDeleteWow I am in a predicament and I need your help ASAP. THANKS in advance. I have a debt from a Repossession in August 2007, I am in AZ and now I have a CA calling me, they told me they would settle my account which is about $3200 for $750, then they immediately changed it to $1200. What should I do should I pay them the settlement or send a DV letter? and then a PFD? I don't want to get burned and then have the CA turn around and say that was just a payment. I am a little nervous because they are threatening with wage garnishment, I am guessing because the account is so close to SOL which is 6 years in my state.
That's a sticky situation. If you have the cash to settle for $750, do it. If they were willing to offer $750 once, they'll do it again. If not, don't play ball. Make yourself hard to work with. File disputes. Catch them on FDCPA violations. Be a thorn in their side. A PFD is always a blessing, but it only has two more years on your credit report anyway. Anything you decide to do, get the agreement in WRITING first. If you don't you can bet your you-know-what that they'll say what you paid was just a payment and that you still owe the remainder. Either that, or they'll sell the remainder to another collector.
Deleteey Lee, I wished I found your blog a while back. I hate this to be long but I need you to understand. I owed for taxes for 2010. I made arrangement with federal and not with state. I figured it will balance out with the state in 2011. I got married and 2011, so when we filled for taxes, someone committed fraud on my husband account.
ReplyDeleteFederal was quick about noticing the fraud and holding the amount I owed for 2010 until everything is cleared up. We should actually be receiving a refund even with my still owing for 2010.
The state taxes however did not go the same. Every since we found out about the fraud on my husband name we have been in contact with the state department. However I received a call from the CA saying that my 2010 taxes were in collections. I started getting the run around from the state depart and started paying the CA. Recently the CA rep told me that my amount was decreased. I believe someone finally saw that we were suppose to get a refund for 2011 and adjusted the amount.
My question is: Can I ask for a PFD on the remaining balance due to the fact that I was ask to pay for an incorrect amount? I believe they sent over and incorrect amount to the CA and therefore should delete it from my account when I pay the remaining balance. The CA told me the state hired them to collect the payment. So should I request the PFD from the tax department? Or should I just continue to pay the debt?
Thank you, Toi
Hey Lee, I wished I found your blog a while back. I hate this to be long but I need you to understand. I owed for taxes for 2010. I made arrangement with federal and not with state. I figured it will balance out with the state in 2011. I got married and 2011, so when we filled for taxes, someone committed fraud on my husband account.
ReplyDeleteFederal was quick about noticing the fraud and holding the amount I owed for 2010 until everything is cleared up. We should actually be receiving a refund even with my still owing for 2010.
The state taxes however did not go the same. Every since we found out about the fraud on my husband name we have been in contact with the state department. However I received a call from the CA saying that my 2010 taxes were in collections. I started getting the run around from the state depart and started paying the CA. Recently the CA rep told me that my amount was decreased. I believe someone finally saw that we were suppose to get a refund for 2011 and adjusted the amount.
My question is: Can I ask for a PFD on the remaining balance due to the fact that I was ask to pay for an incorrect amount? I believe they sent over and incorrect amount to the CA and therefore should delete it from my account when I pay the remaining balance. The CA told me the state hired them to collect the payment. So should I request the PFD from the tax department? Or should I just continue to pay the debt?
Thank you, Toi
I don't know what kind of fraud this involved, but if legitimate fraud was the reason behind your account going into collections, you need to raise you-know-what with the state department. If this is the result of a legitimate error due to someone committing fraud in your husband's name and not your unpaid taxes from the year before, that collection agency should not have been hired at all and has no business showing up on your credit report. If you don't owe anything, DON'T offer the collection agency a PFD. Odds are they wouldn't take it anyway. They're working for the state tax department, after all. They have to keep things on the up and up with correct reporting practices. You need to get this straightened out with the state, not the collection agency.
DeleteHi I got this negative report from collection agency for medical bill of 30 dollars. How can i get it removed from my credit report? CA told me if i pay full amount then they will remove it.
ReplyDeleteSmells like trolling but okay...I'll bite.
DeleteNo CA is going to make a legitimate PFD offer over 30 bucks. If they do, tell them to put it in writing and don't send a dime until they do.
Thank you very much for your advice and time. Really appreciate your efforts here. I called them and they were eager to send me anything in writing. Now i am waiting for the letter and only then i will pay them. should i look for something "special" in the letter?
DeleteThe letter should state that the CA will delete the report from your credit record as soon as it receives payment. That is what you need to protect you in the event the CA doesn't do what it says it will do.
DeleteI am very curious which CA this is. I have yet to encounter one willing to risk the wrath of the credit bureaus over $30. Knowing which ones are easy to work with and which ones are not is extremely helpful to everyone here.
Hi Lee,
ReplyDeleteI was hoping maybe you could help me with my situation. I'm somewhere between Jane and Josh. I have a 4 year old collection debt for $9500. The SOL in my state is 6 years. This the last of my debt and of course is affecting my credit score. I am in a position to pay this off but I am wondering if would be in my best interest. I was considering sending a Pay for Delete agreement but I am afraid that by doing so I will restart the clock.
Should I hold my breath for the next 2 years so that the SOL has passed or should I attempt to negotiate now. I don't plan on making any big purchases in the next 2 years either.
Please help and thank you,
Jen
Hi Lee,
ReplyDeleteI was hoping that you could help me. I have a debt for $9500 with Citi that has gone to collections. The last reported activity on it was 4 years ago and the SOL in my state is 6 years. This is the last of my debt and I would really like to take care of it now that I am in the position to do so. I was considering sending a Pay for Delete letter to the CA but am afraid that by doing so I will be "restarting the clock".
Should I attempt negotiating this debt or should I hold my breath for the next 2 years. I don't plan on making any big purchases in that time.
Please help and thank you,
Jen
Jen,
Delete$9500 is a lot of money. Paying off this debt will not improve your credit score. If your only motivation is the hope that the collection agency will accept a pay for delete, you're taking a huge risk by contacting them. If they've left you alone so far, keep flying under the radar. You're two years away from the SOL expiring in your state. That means they can still sue you.
Here is what is most likely to happen: You send the PFD, the collection agency refuses yet tells you if you don't send them the money anyway, they'll sue – and they just might for a debt that large. So they end up with the money, and you end up $9500 poorer and (if they sue) you also end up with a judgment on your credit report. So your credit score is even worse than when you started!
If a strong sense of moral justice is motivating you to pay this debt then by all means, do it. But I'm no Dave Ramsey. I'm not going to sit here and tell you that the best thing for you to do is pay your debts. In this scenario, I can't see any good outcome other than you laying low until the SOL expires. Then and only then is it safe to negotiate.
And no, sending a PFD request does not reset the SOL provided you are careful not to admit any fault.
Best of luck,
Lee
Thanks so much for your help Lee!
DeleteHi Lee,
ReplyDeleteI wrote last December regarding an old $250 collection. I had contacted the CA to attempt a PFD and all they did at the time was verify the debt. It seems the mortgage company overlooked it (the rest of my credit is excellent) and I closed on a mortgage in April.
I applied for a business line of credit with my bank a month ago and it was declined and it turns out the reason is the the CA re-aged the debt and rather than showing the original date of April 2007, they are showing a much more recent date in conjunction with another date in 12/2011 when I contacted them regarding the PFD.
My understanding is that re-aging is illegal and I can take action to remove it from my credit report. Do you have any advice if I should contact the credit bureaus directly or contact the CA again?
Thanks so much for all of your advice,
Sheryl
Sheryl,
DeleteIs it alright with you if I use your question as a Q&A topic? You aren't the first person with this problem and it would be much more visible to others that way. There are so many comments on this post that I'm afraid those who would benefit wouldn't see your question.
Hi Lee,
ReplyDeleteOf course it is OK. Looking forward to seeing the topic.
Sheryl
Hi Lee,
ReplyDeleteI have been reading blogs on PFD for awhile now and this is the first time I have seen yours. It is very informative, however from my understanding you dont actually think PFD's really work and can be done.I am in the process of cleaning up my CR's and am trying to get ideas. I know that every situation is different but my friend has had success in getting PFD's. She pulls her her report to see what needs to be paid and comes up with her own settlement amount which i think is 25%of the balance and she gets a certifed check or money order and send the payment to the company(whether is the original creditor or collection) along with a letter and endorses the back of the check stating that "upon cashing this check this account is deleted from her credidt report" and its working her score is going up and they have since been approved for a house which is how this started because she couldnt get approved for a home loan at first. So my question is, is this really effective becasue I want to do this and she swears it works, but I dont know about sending them money up front before some sort of written aggreement. By the way she makes copies of the checks and letters that she sends?
You are referring to the method outlined here, sans agreement: http://www.creditinfocenter.com/debt/pay-for-delete.shtml
DeleteNow, Kristy Welch doesn't play around. If she says you need a signed agreement first, there's a damn good reason for it. What happens if the collection agency cashes the check, counts it as a payment and demands the rest? This is very, very possible without a written agreement. If the laws in your state support the consumer in situations like this one (and not all states will) then you've still got to either become an armchair expert or hire an attorney. Filing a lawsuit isn't always cheap, even without legal aid. When you send a collection agency money, you're gambling, plain and simple. They could just as easily gamble on the fact that you lack the resources to fight them if they violate your terms. If worst comes to worst, well, they've got sackfuls of attorneys.
You see where I'm going here? It's a dark and scary place. The scariest part? Sending a payment (and there's a good chance that's all it will be) will reset the SOL, giving the collector the right to sue you.
I'm not saying don't try this method for yourself. Who knows? You may be as lucky as your friend – especially if the debts are held by the same collector. All I'm saying is ALWAYS tread with caution when you're walking on quicksand.
I would be very interested in hearing which collection agencies this method worked with for your friend so I can look into it further and pass the information on to my readers.
Hi Lee,
ReplyDeleteYou're site here has been amazing. I read through many of the first responses and wish that I would have found this site a few days ago.
I have an old dental bill from 2008 that went to collections. I called the CA and they worked with the OC to agree to settle my account for $300 less. I have not paid them yet, as it's bill that my father agreed to pay for me. (He was the one paying my dental bills back then but it was under my name so I got hit.) The issue arose that something wasn't covered under insurance and we weren't notified until later after I graduated from college a few months later and moved away. Hence, the bill got lost in transit.
The amount has already been reported to my credit report and I am just trying to clean it up. Anyways, my question is can I still go back to the OC and pay them directly and ask for them to end their contract with the CA? Would that in return remove it from my credit report?
My dad is researching now before paying them if paying off the collection will improve my credit score, which I noticed from your post it will not. Otherwise, he is not going to pay it. I already bought a new house a year ago so I really have no problems there. I just want to raise my credit score so I can apply for a credit card and/or refinance my car loan.
You can certainly try, but paying the OC will only work if the CA is working under contract for the dentist. If the dentist's office sold the account to the CA, it no longer owns the debt and cannot accept payment from you. Payment would have to go to the CA. If you go this route, try sending a letter to the dentist himself explaining what happened and that you would have paid the debt immediately had you known of its existence. Let him know you were pleased with the services you received and never intended to leave anything unpaid. I have discovered that a physician's office staff are used to dealing with B.S. and are never helpful, but the physician himself has the power to step in and fix things for you. As you may know from browsing around on the site, I have a child with chronic health problems, and I have faced this issue with a doctor's bill myself a couple years ago. I contacted the doctor directly and he rectified everything. It's worth a shot.
DeleteIf the OC recalls the debt, it should also vanish from your credit report. You may want to point out the credit damage it caused in your letter to the doctor. Explain that this unfairly makes you appear financially irresponsible whereas, in this case, you didn't ignore the debt – you didn't know about it at all.
Thanks a lot! I will try this.
DeleteHi Lee,
ReplyDeleteGreat informative site. I'm trying to get my house refinanced under the HARP program and I've verified that my home loan meets all the criteria. I have 2 small credit cards, one with a $250 limit and the other a $950 limit. My middle score was 628 but recently went down to 611 due to a $105 Time Warner Cable bill (NCO collection) from a few years ago. Before receiving the TWC notice, my mortgage broker had already suggested that I pay down the two small credit cards to help my score get to 640. Now with the TWC/NCO notice, he suggested I call to see if they will take a PFD. From blogs I've read, I'm wondering if they will do it for such a small amount?
Probably not but you never know until you try. At the very least you should pay the debt down below $100. Under the new FICO scoring system, collections under $100 do not impact your credit score.
DeleteHi Lee,
ReplyDeleteI would like to purchase a home next year; however, I have poor credit (578 credit score). I have 3 credit cards with a CA, I do not have the full amount to pay them off however, I was interested in trying to settle. I also have a student loan that defaulted and is now with a CA (most negative mark on my credit). The loan is 6K and I will try to settle this also. I'm trying to improve my credit score; however, I do not have the funds to pay for everything in full. Do you have any suggestions? Also when settling debts with the collection agencies do you have any words of advice, as this will be my first time calling to try to settle. Thanks!!
Why one earth do you want to try to settle with collection agencies? Settling your debt with the collectors will NOT improve your credit score one bit. The mortgage lender may demand that you pay it off in full when you go to apply for a mortgage, but that depends on how much the collection is for and whether the SOL for lawsuits has passed or not (mortgage companies frown on other companies having the right to put a lien the home they're providing financing for) The lender could just as easily overlook it.
ReplyDeleteIf it were me, I'd take every dime of that settlement money and start negotiating with the collection agency that holds the student loan and leave the other collections to rot. If you try to negotiate a settlement, you could just wake a sleeping beast called "lawsuit" that you don't want to mess with.
Hi Lee,
ReplyDeleteI'm preparing to mortgage shop in the next 4-6 months and have pulled my CRs & FICO. I have above average scores, but limited credit history (8/2007-present). I am squeaky clean with the exception of a charge-off from 1/2007 (electric bill, roommates bailed).
I see that you specifically address CA's, however I am wondering if there is a track record with utility companies? There is no CA listed for the this debt, just the original creditor. I'd like to offer them a PFD (even @100%), but am wary that I'll reactivate the reporting of the account.
Thanks for all the info!
I have to say, I have never before encountered a utility company reporting directly to the credit bureaus. I'd heard that some of them were doing so these days to participate in that new "alternate credit score" thing, but I have yet to see it. Unfortunately, I don't trust myself to give you any guidance here without having any previous experience with this.
ReplyDeleteIf it were me, I would go to the utility company and ask to speak with someone in charge. Explain the circumstances surrounding the debt and ask to pay it. Utility companies generally sell debts to collection agencies. Just because a collector hasn't appeared on your credit report for that debt yet doesn't mean it won't happen in the near future. Be professional and gracious, and ask about the credit ramifications for you. The utility company may just work with you.
If you get a chance, post another comment and let me know what you decided to do and how it worked out for you. I'm sure that would benefit others here who find themselves in the same situation.
okay, LOOONG story made short, my husband and I did great for the first couple years we were together, and then, lost contract for one of us, partner gone bad for the other, we lost both our vehicles, (partner) drained our savings, husband couldn't find work, we had a special needs child, etc etc etc all within a matter of months, and it lasted for several years. We went to cash only during those years, we rarely were able to pay all our basics, so debt didn't get touched.
ReplyDeleteWe're stable again - yeah! - and living somewhere more affordable (in So Cal when this all occurred, now in Indiana). We managed to pay off debt from our recent (4 mo) unemployment, but are now looking at two debts from 08 that are reporting currently past due monthly, even though we haven't made a payment since June of 2008. One a cc for $2500, and one the balance of a repo-ed car after it went to auction - $3500. Advice? I don't think it would be hurting our score so much if it reflected it was 4 years old, but it is my understanding that they are allowed to screw with us like that if they feel like it.
Our credit is in the 500s, even though we recently opened a CD for $1000 (bank provided for credit building - we don't have that much on hand). What do you suggest for these old debts?
HI Lee I've been reading through this a lot, But still very new to this all. Im 20 years old and some complicated family problems and not understanding debt got me into a $64 bill thats now in collections. I see you saying it doesn't effect your FICO that much (witch I'm very happy about). But should i even pay it? Will it help in any way to pay it off? also does your SOL restart even if you pay it in full? Thanks a lot for the information its helped me so much!! quick thing my trans union score from Creditkarma.com was 730 and now has went down to 650. does this reflect anything.
ReplyDeletePaying it doesn't do anything. The only time I'd bother is if you're trying to get a mortgage or other major loan. Lenders generally require that you pay those things off first, no matter how small they are. If you pay in full, there should be no need for an SOL, but yes, it restarts. Then if the CA doesn't record your payment properly or sells the debt as unpaid, you're still subject to a lawsuit. If you pay, get written proof that you owe a zero balance to the CA.
DeleteWithout seeing your credit report, I couldn't comment on your score drop. But my guess is you were pulling scores other than your FICO. Different scoring methods result in different scores. ONLY buy your scores from Fair Isaac and NOT the credit bureaus or any third party company.
Hi Lee,
ReplyDeleteI'm a 25yr old male. When I was 18 I took out a couple credit cards and did some major damage. Didn't pay for any of them. I grew up and realized how bad that was and decided I want to clean my credit, also because I was in the market to buy a house. Slowly everything has been cleaned except for a couple of accounts. One of them is a $373 balance from Verizon which they sold to Pinnacle Credit Services which they sold to Vision Financial Collection Services. They are now willing to settle for $150. I called and offered them to pay it off but I would need a letter of deletion. I now know thats not doable. Lender wont approve me for a loan until this stuff is taken care of. What are my best options? Just pay it off and have it sit on my credit report as "paid"?
Keep in mind that negative information can only remain on your credit report for seven years starting from the first 180-day delinquency. Because you took these accounts out seven years ago, odds are they're close to disappearing. The credit bureaus must remove these debts after seven years regardless of whether they're paid or not. So if you have to pay $150 to get a mortgage approved, its not the end of the world. Paying the debt won't cause it to sit on your credit for another seven years. It will be removed when the reporting period elapses. It won't sit on your report as "paid" for very long.
DeleteHi Lee, thanks for the info.
ReplyDeleteA CA called me today for the first time regarding a bill I owe for ~$400. This is a charge from my old apartment complex.
I have pretty good credit with little delinquent payments. Is it too late to pay the apartment to call off the CA? Or once the debt is sold I'm screwed?
What are my options here for coming out of this with as little damage as possible?
Thanks!
There's no guarantee the apartment complex actually sold your debt. They may have merely hired the CA to collect on a contingency. If this is the case, you may be able to call the apartment complex, pay them, and bypass the CA altogether. If the CA has already put the debt on your credit report, the apartment complex can require that the debt be removed – IF they didn't sell the debt. If they sold the debt, you have to deal with the CA. Depending on how old the debt is, it may fall off your credit report soon on its own.
DeleteHi Lee,
ReplyDeleteI'm 25 years old and just received my credit report from Equifax. They are showing that I have 2 collection accounts. One account's "date of first delinquency" is 11/2007 with a balance of $677 (Alltel). And the other account's "date of first delinquincy" is 02/2008 with a balance of $504 (Sprint).
These were cell phones that my father and his friend had in my name (I was 18 when they did it). I am working on establishing/repairing my credit in order to qualify for a first time home buyer program, and was wondering the best route to go with these collection accounts. I have the money to pay them off, but should I attempt to do a PFD letter? My hope is that maybe they will go for it since the dates on the accounts are getting older. What do you think?
As for trying to build my credit, in July I got a secured credit card with Capital One, and within 4 months they raised my credit limit from $376 to $476. And I paid Equifax $7.95 for my credit score, and they said it was 622 :(
Thank you in advance.
- Erica
This comment has been removed by the author.
DeleteErica,
DeleteStart with pulling your FICO score. Unless you specifically requested a FICO through Equifax, they sent you a VantageScore. That's the credit bureaus' own credit scoring formula. Lenders don't pay it any attention. You need your FICO. You can buy it directly from Fair Isaac at myfico.com.
If your father and his friend got cell phones in your name without your consent, that's identity theft. FILE A POLICE REPORT. The Fair Credit Billing Act requires the credit bureaus to block information that appears on your report as a result of identity theft.
Otherwise, you can request a PFD, but do so at your own risk. You don't mention which state you live in, but if you have been out of contact with the collection agency and suddenly pop in offering to pay in full for deletion, the CA is going to see that you have the money and they're going to come after you full throttle. If the SOL is still in effect, that means they may sue you and forcibly take the money. If the SOL in your state has expired then by all means, request a PFD. Make sure all communication with the CA is in writing and never, ever agree to pay before they provide you with a written agreement to delete the negative information.
Hello,
ReplyDeleteYou seem to run a really great operation ( a lot of good info here)!
I have an account of about $3000 that has been charged off but still with the original creditor. The delinquency is over 180 days. They say they have settlement options or I can pay in full to avoid being turned over to collections. I asked for pay for delete and was turned down. My goal is credit preservation - I understand that settlement vs paid in full does not make much difference in my Fico score.
So I'm wondering what's my best option. (1)Should I persistently try for the pfd (send letters/ escalate) ?(2) Should I just settle, and if so what is the max amt I should be willing to pay since still with original creditor?(3)or should pay in full and accept delinquency? (4) I am also wondering is there any other reporting alternative such as citing the delinquency history but removing the charge off and just reporting the account as closed, and if so is this beneficial?
Thanks in advance for any insight!
Original creditors almost never do PFD. That would require deletion of the entire account history. If it were me, I'd offer to pay the debt in full (no settlement) in exchange for the company deleting the late payment notations (not the entire tradeline). The bad news here is that those late payments have already trashed your credit. But that debt is high enough that many collection agencies would waste no time at all suing you. If you pay in full, you can probably mitigate some of the damage. If the customer service rep doesn't agree, call back and talk to another rep. And always, always, always get any agreements in writing before sending in your payment.
DeleteHi Lee,
ReplyDeleteMy husband and I are currently looking to mortgage shop. After pull our credit reports I discovered that I have two CA's one originating in 01/2008 for $212 and the other one was placed for collections in 12/2008 and my husband has one from 06/2008. We are a military family currently stationed in TX. Should I do a a PFD for these debit or should I just pay them off? We were told by a bank that the debit must be paid or resolved before closing on a house. Any advice would help greatly. Thanks
Lee,
ReplyDeleteHello my husband and I are currently in the process of applying for a mortgage (VA Loan)to buy our first home. During the application process we discovered that we have a total of three account in collections, one is for a cell phone bill for $61 that was placed in collections in 12/2008, another one is for a closed bank account for $212 placed in collection 11/2007 and my husband has one for a unpaid cell phone bill of $361. Would you recommend us to pay the CA or do a PFD? A lender told us that the accounts must be paid in full or resolved prior to closing on a house. Any advice would help.
Pay for delete's aren't common anymore and when collection agencies agree to them its usually only if the amount is thousands of dollars. It isn't worth the risk for a CA to do a PFD for small debts like yours. If it were me, I'd bite the bullet and pay them.
DeleteBut try the PFD first. The worst they can say is no.
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ReplyDeleteLee. What do you do when a tradeline shows no balance and is listed as closed with "Claim filed with government"?
ReplyDeleteI have no idea why any tradeline would reflect that unless, perhaps, if it were a government debt. I'd need more info to help you.
DeleteHi Lee,
ReplyDeleteI have a collection account on my CR from a clothing store in the amount of $300. I contacted the bank directly because they have not sold of the debt. At first I asked to settle for half the amount and have the TL deleted, of course I was told no. The agent told me she will provide me with a deletion letter if I paid in full -fees. I agreed and paid by cc. A week later I got a letter stating debt was paid in full. I was outraged because I was lied to and tricked. I called the rep the next day and she informed me she made a mistake. She acknowledged that our agreement was pay to delete and is now not able to hold her end of the deal. I feel we had a verbal contract that has been breached. The reps supervisor is reviewing our original call but telling me they still may not provide a deletion letter. Do you think they will?
Unfortunately no. This is more common than you'd believe. Debt collectors have no qualms lying to debtors in order to get a payment and either meet that quota or collect that bonus. If your state allows one-way recording, you may be able to pursue the verbal contract angle if you can get the rep on tape admitting to making that promise, but I can't guarantee that. I am sorry you had to experience this, but perhaps it will serve as one of those school-of-hard-knocks lessons that protects you from being swindled for an even greater amount later one. Always, always, always get the complete agreement in writing before paying a dime. Always.
DeleteThank you for all the guidance you have provided on here. I received a collection notice for an er out of network physician bill. Its about $1100. Paying anything more than 20% is impossible for me. How do I communicate to them by letter that that is all in my bank account so they will accept. I am below federal povery level and do not know what my rights are regarding collections. I was thinking to have them validate because I do not know if this is in house hospital collections or sold out. I just want to settle this but paying anything higher is impossible.
ReplyDeleteIf you are below federal poverty level you might qualify for Medicaid. Medicaid pays retroactively for 90 days, so if your hospital stay took place over the last 3 months, you're covered.
ReplyDeleteOtherwise, call the hospital and ask about indigent programs for those who cannot afford medical care. Keep in mind if the debt has already gone to collections and is already on your credit report the damage is done. Paying it won't make it any better.
Oh, and word to the wise, no matter how broke you are, don't EVER tell a collector what's in your bank account.
There is no 10 year reporting in any state. Reporting takes place for seven years from the first 180 day delinquency. Before you default on your credit cards, I strongly recommend that you contact your credit card companies and explain what's going on. If the credit card provider sees that you are serious about making the payments but cannot, they may work with you – preventing any additional credit damage. Best of luck.
ReplyDeleteLee,
ReplyDeleteI have tried to read through these comments to see if by chance someone had asked a similar question and if you had answered, but I haven't quite found the information I was looking for.
I just recently (today in fact) pulled my credit report to find that I have a single medical bill that was sent to collections. The amount that the collection agency currently tells me is due is $184. The date of the service was 6/17/2011 and the original biller told me that it was sent into collections in November of the same year.
I know that this is probably a widely used excuse for a lot of people, but the reason this bill went unpaid is because I simply never received any notification of the bill to begin with; no mail correspondence, phone calls, emails, nothing. Part of the reason for this might be because I moved from the address at the end of June 2011, BUT before doing so I definitely made sure that my mail was forwarded to my new address (for which I still have documented proof of). Likewise, once the account was sent into collections I did not receive any notification from them either. What makes this situation even more frustrating is that for the same medical visit I received a bill from the facility, which had in fact been forwarded to my new address and which ultimately was paid properly.
I called the collection agency and asked if they would remove the information from my credit history if I were to pay them to which they (not-surprisingly) replied no. Likewise, I was able to find out from the collection agency the name of the original biller for the account and have contacted them as well to find out what if anything can be done. The lady I spoke to was polite and has informed that she has to check with another individual further up the chain of command and that she would get back to me.
Basically, I am trying to find out what my options are in this case and what if anything I can to do properly arm myself so that I can (hopefully) have this collection account removed from my credit history. My fiance and I had hoped to possibly purchase our first home at the end of this year, but I now feel like this will be an insurmountable challenge that could ultimately stand in our way of ever realizing our ultimate dream as a couple and (hopefully) one day family.
Any advice would be greatly and sincerely appreciated.
Regards,
Dan Smith
Dan,
Deleteyou have a long post, and you aren't alone in your situation. Accidental collections are common and you do have some options. Because there are others who struggle with this as well, I'd like your permission to make your comment a reader question post. This would allow me to give you a more thorough answer.
Lee,
DeleteYou have my full permission to use my post. Thank you for taking time to lend some helpful advice.
Regards,
Dan Smith
I went to do the post and realized I forgot to ask you the name of the collection agency and which state you're in. That will go a long way toward giving you a more specific answer.
DeleteHello, I have a situation where I owe a CA for an Energy company ($182Org. Crdtr+$8CA Fee) back from 9/30/2007. The CA is steadily reporting to the Credit Bureaus monthly so the status date is showing the current month/year i.e. 1/2013, and they report on the 21st of each month. Is there any way I can get those dates changed back to the original report date? It hasn't been 7 years yet but I thought the agencies were prohibited from reporting to offset the fall off date?
ReplyDeleteHello, I have a situation where I owe a CA for an Energy company ($182Org. Crdtr+$8CA Fee) back from 9/30/2007. The CA is steadily reporting to the Credit Bureaus monthly so the status date is showing the current month/year i.e. 1/2013, and they report on the 21st of each month. Is there any way I can get those dates changed back to the original report date? It hasn't been 7 years yet but I thought the agencies were prohibited from reporting to offset the fall off date?
ReplyDelete