“Settle Collection Accounts or Pay them in Full?”
Good morning Joe.
I wanted to make sure that you received my packet. I began paying off debt. You used the term settle in your past email. Does settling the debt have the same positive effect on my credit, verses paying each debt off completely? Obviously my money will go a lot further if I can just settle.
There are many important reasons to get collection accounts resolved that show up on a credit report.
Most collection companies report the negative information to the credit bureaus each and every month which lowers credit scores. The quicker the debts are resolved the sooner scores will start to improve.
Resolving collections can be done a few different ways. Paying them in full, getting the creditor to accept less than full payment or setting up a monthly payment until the debt is paid off.
Understand that if a monthly payment is set up, the creditor will not notify the credit bureaus until the debt is paid off and will continue reporting the debt negatively until paid.
One more consideration is that some creditors will agree to take the debt off the credit reports all together if the obligation is paid in full but that won’t be done unless you ask and that is part of the negotiation.
Subscribe to my blog via Email:
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.
Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.