I have a closed account which was a collection in my credit report. There is still some money due to the account. My question is, does it changes anything in my score if I pay it since the account is already closed?
Hi Osvaldo
If the name of a collection agency appears in your credit report against a debt, it means that the OC has either sold off a debt to the CA or has transferred the right to collect the debt to the CA. Now if the debt has been sold off to the CA, you can negotiate with the CA for PFD to get the negative listing out of the report, but the OC listing will stay there for seven years. However, if the debt has not yet been sold off, you can negotiate directly with the OC for PFD and if you can make the OC agree to PFD, the negative listing will be completely removed from your credit report once you pay off the debt. If the negative listing gets removed from your report, your credit score will definitely improve.
Yes, I agree with Mary. Even if they do not agree to pay for deletion agreement, you should always take steps to repay back an outstanding debt because if the SOL for the debt has not expired, you may be sued by the creditor to the and the creditor may bring judgment against you to recover the debt which may badly affect your credit score. So if they do not agree to PFD, try to make them agree to change the status of the listing in your credit report to "paid as agreed" in your credit report.
Even if you pay off the debt in full, your credit score may not improve because the creditor may not remove the listing from your report and will only list it as "paid in full". But if the SOL period for your debt has not expired yet, there is a chance that the creditor may sue you to the court and bring judgment against you to recover this amount. Moreover, apart from judgment, if the creditor even charges off the debt, it may have negative impact on your score. So you should pay it off because it will save you from further drop in credit score.
If the SOL has expired then I would definately leave this debt be. It could be a bigger nightmare if you start contacting them for repayment and you will start your SOL over if it is expired and you make a payment. Paying them off really doesn't have the effect you are going to want for your credit score.
Hi Osvaldo
If the name of a collection agency appears in your credit report against a debt, it means that the OC has either sold off a debt to the CA or has transferred the right to collect the debt to the CA. Now if the debt has been sold off to the CA, you can negotiate with the CA for PFD to get the negative listing out of the report, but the OC listing will stay there for seven years. However, if the debt has not yet been sold off, you can negotiate directly with the OC for PFD and if you can make the OC agree to PFD, the negative listing will be completely removed from your credit report once you pay off the debt. If the negative listing gets removed from your report, your credit score will definitely improve.
Yes, I agree with Mary. Even if they do not agree to pay for deletion agreement, you should always take steps to repay back an outstanding debt because if the SOL for the debt has not expired, you may be sued by the creditor to the and the creditor may bring judgment against you to recover the debt which may badly affect your credit score. So if they do not agree to PFD, try to make them agree to change the status of the listing in your credit report to "paid as agreed" in your credit report.
Even if you pay off the debt in full, your credit score may not improve because the creditor may not remove the listing from your report and will only list it as "paid in full". But if the SOL period for your debt has not expired yet, there is a chance that the creditor may sue you to the court and bring judgment against you to recover this amount. Moreover, apart from judgment, if the creditor even charges off the debt, it may have negative impact on your score. So you should pay it off because it will save you from further drop in credit score.
If the SOL has expired then I would definately leave this debt be. It could be a bigger nightmare if you start contacting them for repayment and you will start your SOL over if it is expired and you make a payment. Paying them off really doesn't have the effect you are going to want for your credit score.
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