I've read various recommendations over the years. Some say pay off debt you have in collections; other say let it sit and fall off if it's going to fall off in a certain time frame (say within the next two years). Which is a better route if you are trying to raise your credit score in the fastest way possible??
It really depends on your overall situation and if you are planning on applying for new credit in the near future. Negative items on a credit report will have a smaller impact on your overall score the closer it gets to seven years or falling off your credit report. If the collection is fairly recent (a year or two) it would make sense to pay it off if the debt collector to agrees (in writing) to delete the item from your credit report once paid in full. However, if the debt is past the statute of limitations, then you probably would not want to pay it as this would restart the clock for the debt collector to sue you.
It takes time to get knocked off your report. Normally you can settle with a debt collector at half the cost - i.e. I've let mine sit for a while, I'm not trying to apply for new credit but if I pay them I could apply for new credit. They also have payment plans I know someone paying $5/mo.
Those debt consolidation financial advising peeps are also another good resource.
Can a debt collector or the original debtor freeze your bank account or any other financial account you have and take money out of your account?
Well if you do pay it off make sure you get a letter from the company before you pay it off that says they agree to remove it from your credit. Just paying it off is not automatically going to remove it from your credit.
I'm working on repairing my credit. I recently received a new credit card and am paying it off….
Cant wait until mine is good
i paid mine off recently havent seen it on my credit yet
Anytime you have something negative showing on your credit it hurts you overall. So if you are trying to rebuild your credit then this will always impact your score negatively. So I think it all depends on what you are wanting to accomplish.
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Okay great
Hm
I wanted as good a credit score as soon as possible. I am paying off my debt. Many people need as good a credit score as possible to get a job.
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Continue to pay off
Can a debt collector or the original debtor freeze your bank account or any other financial account you have and take money out of your account?
**What do you do if credit cards went to collections during COVID???
Hola
Definitely dispute it with the collection agency first. Sometimes they will remove it if they see you disagree with the collection and it doesn't look like you're going to pay. it's a waste of their money to leave it there. Most of the damage to your credit score is done when it initially hits your credit and then lessens over time.
