First, I'm a newbie and my credit sucks. Most of it is valid and my fault but this the year of repair and new habits for me. I've given myself a year to pay off all my debt and clean up my credit prior to buying a house. I pulled my Equifax report and it is bad- the score makes me cringe. Needless to say I have a lot of work to do. I'm busy reading the sticky posts (Primer and FAQ) and have a question, if I have the money to pay some of the collection accounts should I? They are valid and I want to clean them off but I'm not sure where to start. 1. Pay the Collection Agency 2. Try to pay the Original Creditor 3. Write letters to CA to negotiate payment/deletion 4. Write letters to OC to negotiate payment then fight with CA to get deleted.
If any accounts are still in the hands of the OC, but late, you might focus on bringing them current first, if you can. If you can, you might preserve some credit accounts to use when rebuilding once you finish dealing with the rest.
Edit I found a post from Marie that says NEVER to deal with the Collection Agency. I'm a little confused by the Validation process- Sure you want the item deleted-- but I do owe the money. I WANT to pay my debt, however it seems that if I just pay it will harm me in the sense of Date of last activity. SHould I negotiate with the CA for deletion if I know I actually OWE The debt??
I'm not sure. The Collections for the most part are Older (year or more). Mainly old cellular carriers and a bank with some nefarious after closing fees. My Equifax report only shows one as being SOLD (lists as a factoring company whatever that is).
A "factoring company" is what some JDBs call themselves, as part of claiming they are not "debt collectors". Under FDCPA, they are debt collectors. Factoring companies buy performing receivables accounts. Debt collectors buy defaulted ones.
Never deal with a collection agency is very misleading advice. Bud Hibbs also gives that advice and even goes so far as to advise people to send them a cease & desist letter. Truth is that once the debt has been turned over to a collection agency you have no choice in the matter other than simply ignoring them. The real truth is that the debt is the property of the creditor. To him it is an asset and of course he can do what he pleases with his assets. He can sell them or assigne them to a 3rd party if he chooses to do so. From your standpoint, paying them is a bad option because paying them will not help your credit ratings much if at all. In fact it can actually lower them even more if the amount is fairly small. If you pay off a large debt then you will get some help because that will be seen as lowering your total indebtedness but it would take several thousand dollars to make much of a dent in that. The older the debt the less impact it has on your credit score. Then there is the potential of a lawsuit against you. A judgment will always hurt your credit too. Before you decide what to do you need to understand all of the ramifications. In general, paying them is not a way to help your credit scores and should only be done if you feel that you have no other alternative. Just don't do it with the thought in mind that paying them will help your credit scores because it probably won't.
