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I have a phone bill payment that was bought by a CA. I have been denied a student loan because of the old debt. I don’t know whom to pay the CA or the phone company. If I pay will it show on the report as “paid� Since the debt is very old want to fix my report by cutting a deal with the CA. Will that affect my score?
Thanks in advance for any help.
Hi Dacey,
It is always best to fix your credit, before you apply for a loan. Since the collection agency has purchased the debt, you will have to pay the debt amount to them. But before you make any payment, you should ask for a debt validation(DV). You will find a sample DV letter in the Letters of Credit. The CA should provide you with the following documents, once they are able to validate the debt:
1)Any proof that the CA has purchased the debt from your original creditor.
2)The account payment details, the amount you owe, late fees if any.
3)Your account payment history from your original creditor.
You can negotiate with the CA to reduce the debt amount. It is sometimes possible to reduce the debt amount by 40-60%. Before you make any payment send the CA a Pay for Deletion Letter. You will find a sample of a Pay for deletion letter in the following link: http://www.creditmagic.org/repair/pay-for-delete.html . This letter is a written agreement that once you have paid the debt amount, your credit report will be updated. The negative remark will be removed from the credit report and updated either as "Paid" or "Paid as Agreed". Once the negative listing is removed it will have a positive affect on your credit score.
This debt trap concerns the latest "craze" for the unsuspecting user - the cell phone.
When debt consolidation, debt help, debt relief, and debt management are among the most widely searched terms on the internet, cell phone debt is rising in epidemic proportions.
Most often it is young people who are affected. They do not seem to realize that excessive use of cell phones (also called "mobile" phones) are an instant way into never-ending debt.
Cell phones are convenient. Just don't make the convenience one that you will be forever paying off.
Hi Dacey,
If I pay will it show on the report as “paid� Since the debt is very old want to fix my report by cutting a deal with the CA. Will that affect my score?
If you are thinking of settling the debt amount, it is possible that it will be listed on the credit report as "Paid as Agreed". This will improve your score and also have a positive effect, if you apply for a new line of credit in future. Most creditors will be interested in the fact that you try to pay off your old debts.
Because your debt is very old, you should also check whether it is within the SOL period. If the SOL period is over, the collection agency should cease all collection practices. CAs cannot sue you for debts that have crossed the SOL period.