Questions About Paying old credit cards

[venessa1524]

I have 8 credit cards, about $25,000 in debt, creditors have sent me collection papers for all of them. i fell thru hard times and all my cards went to collections.

now i wanna try to pay them back off. alot of them have sent me settle out amounts for almost 40-50% off

question 1- if i pay all my debts off will it help my credit score or since its been 2-3 years that it wont matter?

question 2- what are the odds of the agencies deleting these off my account after paying them? is it worth paying these off now?

question3-if i pay these off how long would it take to make my credit score go up? any help would be great just really scared that if i pay these off then it wont make a difference

[Lian]

FICO does not score the payment or nonpayment of debt, so paying wont produce an increase in your credit score. FICO scores the delinquencies that have occurred.

Deletion of the underlying delinquencies and derogs are needed to gain score improvement. The most often method used to attempt deletion of the underlying derogs is to offer payment in exchange for their deletion (PFD). Acceptance of such an offer by the creditor or debt collector is totally discretionary on their part. The higher your payment offer is,the better your chances usually are for their acceptance. Always get an acceptance of your PFD offer before sending any payment.

Collections are major derogs, and their affect on your credit score declines slowly over time. How much of a decline is dependent upon other items in your personal credit report. Deletion of one collection when others remain has much less affect than deletion of your only reported collection.

[Suffering from a Tax Lien]

venessa1524, you should definitely settle them if you have a chance to, even if it doesn't immediately impact your FICOs.

Here's why: you can be sued for them. If you have outstanding balances of over $2,000 (which you probably do) it's worth it for them to try to get a judgment against you. That judgment will basically "never" go away, and even if it drops off your credit, you will still need to pay it before you can get a mortgage or big loan. It's collectible (with interest) for many many years, and let's say you have a lot of money ten years from now, they can demand the full amount, plus all the interest, and if you have a lot of money, you will be in a very bad position to negotiate with them and you will really regret that you didn't take a 40% settlement offer.

Think of it: pay the 40% today, rather than risking paying 100% (plus interest) a few years from now.

Also if they are paid, you might be able to get them deleted. I had one CA that I paid off. A year later I disputed it. I presume they had archived the file and didn't respond in time to the dispute and so it disappeared from my credit, even though it was a perfectly valid entry. I'm not sure if this is a recommended technique but it did work for me.

[Game Plan]

Originally Posted by Suffering from a Tax Lien

Also if they are paid, you might be able to get them deleted. I had one CA that I paid off. A year later I disputed it. I presume they had archived the file and didn't respond in time to the dispute and so it disappeared from my credit, even though it was a perfectly valid entry. I'm not sure if this is a recommended technique but it did work for me.

I agree with this. I would try a PFD first. If they refuse the pay for delete and you settle they are, in my opinion, less likely to verify the accounts when disputed at a later time. If you no longer owe them money they have less motivation to spend the time answering disputes.

[Suffering from a Tax Lien]

Originally Posted by Game Plan

If you no longer owe them money they have less motivation to spend the time answering disputes.

That's my feeling. Again, I don't know if this is the recommended approach or not but it worked great for me!

My other idea (which I haven't heard discussed anywhere before) is, try timing your disputes. File the dispute so they will start processing it just before Christmas. How many staff are going to be around over Christmas / New Years? Do they really care to spend time tracking down and verifying some old file that's already been paid off? I'm trying to get my state tax authority to delete an old (paid-off) lien, and if my efforts don't work, I'll just dispute it on Dec. 22nd and hope that they will be too short-staffed to verify it.

[Juss11]

Originally Posted by Suffering from a Tax Lien

venessa1524, you should definitely settle them if you have a chance to, even if it doesn't immediately impact your FICOs.

Here's why: you can be sued for them. If you have outstanding balances of over $2,000 (which you probably do) it's worth it for them to try to get a judgment against you. That judgment will basically "never" go away, and even if it drops off your credit, you will still need to pay it before you can get a mortgage or big loan. It's collectible (with interest) for many many years, and let's say you have a lot of money ten years from now, they can demand the full amount, plus all the interest, and if you have a lot of money, you will be in a very bad position to negotiate with them and you will really regret that you didn't take a 40% settlement offer.

Think of it: pay the 40% today, rather than risking paying 100% (plus interest) a few years from now.

Also if they are paid, you might be able to get them deleted. I had one CA that I paid off. A year later I disputed it. I presume they had archived the file and didn't respond in time to the dispute and so it disappeared from my credit, even though it was a perfectly valid entry. I'm not sure if this is a recommended technique but it did work for me.

Old thread,but have a question.
I had a judgment for about $5,000 back in 1993.It has not been on my CR for years.So now im worried that it may still be there and stop my wife and I from buying a house next year?I thougnt after 10 years they were gone?I was only 20 at the time & it was over a bussiness I had that didnt make it.Closing in on 20 years since I got it.Wow thats scarry!

[Lian]

Judgements cease to be included in your CR after 7 years from the date of the judgment. FCRA 605(a)(2). They cannot be reinserted.