Raymond,


Obviously, a collection agency won't give you an agreement in writing that they will remove the item if you pay them. That would be suicide for them as far as their licence and bonding goes.

Why would a collection have problems with licensing if they gave the consumer an agreement in writing that they would remove an item once it's paid.?

I agree in one regard... A collection agency doesn't want to do anything in writing because it would slow their whole process down. They want to make phone calls, and not write correspondence.

Their business efficiency relies on them making thousands of phone calls a day and hitting their percentage.

That doesn't mean that they won't agree to remove something from your credit report. They just need enough leverage.

I just noticed this issue brought up by a blogger. It's a month old but I was on course writing some exams and so I missed it.

It deals with what is a relatively minor matter in itself; yet it is illustrative of a very important point.

I've chastised a lot of collectors who have come on the site telling us how beneficial it is for debtors to pay off their delinquent accounts.

As I've mentioned, oftentimes, it will do more harm than good (moral considerations aside) as far as credit scores go.

"Vitzbitz" has, in principle, reset the reporting date of the account on his credit report because it's determined by the date of last activity on the account. That date refers to when a payment, written acknowledgement or a court judgment was made. With respect to court judgments, it's the date of judgment that counts, not when you pay off the judgment, which might be many years later.

I'm surprised that such a small item was on there as more often than not they won't be. However, exactly the same thing happened to me when I was applying for a mortgage back when I was a kid with regard to a small overlooked phone bill.

My best friend is in credit scoring, and he mentions because of the amount and more because of the age, that the item won't be too harmful. Still, you can see my reasons for concern.

The item, at worst, would have dropped off by 2009 and was only on the Equifax and not the TransUnion reports. By paying off the account (if he did), the date of last activity now becomes 2007. Therefore, now the damn thing will possibly be on both credit bureaus until 2013. If that wasn't bad enough, the R9 will have more of an impact on a credit score when it is relatively new than when it has aged 4 years or more. Collectors like "jaimedude" will tell you that it will help your credit score by showing the account paid or settled but that's not true. Furthermore, future creditors don't know if the account was paid in full or settled for a fraction of the outstanding balance as the report will not likely reveal that detail.

It's most important to understand something I've worn myself out by saying: ALL COLLECTORS ARE LIARS! They will do or say anything they can to get your cash. Thus, it's highly unlikely that even if "Vitzbitz" paid off the account in full, the collector can or would be able to remove the account reporting information.

In fact, because they're bonded, it would at least, in principle, get him into trouble for supplying false credit information to the bureaus. Think about it: if the collector could submit or change negative (but valid) credit information about someone like "Vitzbitz," then he could do it for one of his buddies or for someone willing to pay him a bribe.

Obviously, a collection agency won't give you an agreement in writing that they will remove the item if you pay them. That would be suicide for them as far as their licence and bonding goes.

Having said all this, in practice, Equifax reports are notoriously screwed up and it's very difficult to predict exactly what information they will have on them.

Ray

Hey vitzbitz,

Unless you've got an agreement in writing with the collection agency, they're more than likely not going to change the item with Equifax.

You'll probably have to wait until the item naturally drops off your credit report.

In the mean time you can show the mortgage creditor that you paid the item using your cancelled chq etc.

Ok, here's a specific question for you credit repair gurus.

Back in 2002 I moved across the country, closing out my department store cards before the move (or so I thought). I accidentally missed one card (due to the billing cycle and my own carelessness) and had a debt of $125 go unpaid.

As I had moved the creditor was unable to contact me, and in fact waited almost four years before turning it over to collections (who still failed to contact me). I was happily oblivious to this black mark on my credit report (and NOW I appreciate the advice here about regularly reviewing your credit report)

I found out about the negative entry when applying for a mortgage, and with a bit of persistance tracked down the collection agency and made arrangements to pay the debt immediately (the irony is that the collection agent still played the hardcase with threats, despite the fact that I had called him...go figure).

The debt was paid the same day I found out about it, but my credit report (despite the promises of the collection agent) was never updated to reflect the fact that the debt was paid (not too shocking, collection agents and their promises are well known here).

I disputed the entry with both equifax and transunion. Transunion did their research and removed the item from my credit report with no problem, equifax sent me back a form letter demanding documentation showing the debt had been paid before they will correct the entry.

The entry dates back to 2003 for the debt going bad, so the entry should purge altogether from my credit report in 2009.

Here's the question:

If I obtain some documentation from the original creditor and resubmit my dispute with Equifax causing them to ammend the entry will that "reset" the date of the entry and leave the bad debt on my credit report for another six years?

Would it be wiser to leave it as it is (with less than 17 months left before the original first 6 years lapse) and just wait it out?

The bad debt was entirely of my own creation, but I am looking for the option that will have the least impact on my credit report. I've already borne this black mark for 4 1/2 years, I just don't want to accidentally create a situation where it's on my report for 10 years through my own enthusiasm to clean up my credit report.

Thanks in advance!