Credit Score: Improving Score

[kranky]

I am fanatical about ethical behavior, but there's nothing wrong with using the law to defend your rights.

I don't want to derail this thread, but let's say I get a letter from XYZ Collection agency telling me to pay them $400. I might remember that I had an old outstanding bill from a local store for $200 and it might be that account. But it might NOT be. Maybe XYZ has a bunch of screwed up records and they want me to pay for someone else's debt. The law says they have to produce documentation to back up their claim, and they have to produce it if I dispute the debt. Maybe the local store I owed $200 to went out of business or simply wrote it off and I don't owe anything to anybody.

Nothing unethical about that. They should have to prove I owe the money. Why should I pay them anything just because they demand money, especially if I have never dealt with them directly? "Oh, we represent Megacorp and you owe us $400." Prove it. The law says you have to.

 

[kranky]

Originally posted by: dullard

Originally posted by: kranky
Illiterate? Write for a free brochure!

i be wantyng dat brosure 4 sure!

I note you are writing, and what you wrote clearly indicates you read my sig. That's reading AND writing. You're not really illiterate, are you?

NO brochure for you! 😛

 

[OCGuy]

Originally posted by: StarsFan4Life
Ok, my bad. I just want to do this in the most effective way possible. Even if the accounts remain on my account, but are paid in full....will my mortage officer take this into consideration?

Most brokered loans these days are channeled through Fannie/Freddie. They will not care that you have had collections in the past, they will go by your middle score.


If the Automated Underwriting findings say that you have to pay them off before the loan can close, you will have to anyway, even if you say they are not yours. At that point, they will be paid through escrow, (in escrow states), and you will not get the benefit of a higher score.

 

[StarsFan4Life]

Ok, let me state this question one more time.

If I pay these off and they still remain on my credit score (for 7 years from original collection date), but show as paid in full....will my score improve AT ALL?

 

[OCGuy]

Originally posted by: StarsFan4Life

If I pay these off and they still remain on my credit score (for 7 years from original collection date), but show as paid in full....will my score improve AT ALL?

Yes. The older the collection is, the less damage it does to your score. This means that the improvement to your score will also be a little less if it is old.

Your score will be calculated by the date the tradeline was opened, however. If the account was recently sold again and shows as a new collection, it will help more.

 

[dullard]

Originally posted by: kranky
I note you are writing, and what you wrote clearly indicates you read my sig. That's reading AND writing. You're not really illiterate, are you?

NO brochure for you! 😛

Yeaa, I get freee brocure!

 

[AlienCraft]

Originally posted by: Ocguy31
They cannot be completely removed anymore by the creditor. You should call each one, pay them, and get a letter mailed stating that you have a 0 balance and the account is paid in full.

If you do this, without a letter in hand or a recording of them (the collection agency) agreeing to rectify your account on the credit Reporting bureaus, you'll be screwed, because it will just show as a late paid off in collections and they have no incentive to help you. The only time you have any power with them is before you pay. There is no authority from them if they cannot produce the validating documents.

Ther original creditor will always show this has "sold off to collections", so that ding is yours to keep.

What you don't need is the second one from the junk collection agent if they can't be bothered to obey the law like the rest of us.

 

[StarsFan4Life]

Originally posted by: AlienCraft

Originally posted by: Ocguy31
They cannot be completely removed anymore by the creditor. You should call each one, pay them, and get a letter mailed stating that you have a 0 balance and the account is paid in full.

If you do this, without a letter in hand or a recording of them (the collection agency) agreeing to rectify your account on the credit Reporting bureaus, you'll be screwed, because it will just show as a late paid off in collections and they have no incentive to help you. The only time you have any power with them is before you pay. There is no authority from them if they cannot produce the validating documents.

Ther original creditor will always show this has "sold off to collections", so that ding is yours to keep.

What you don't need is the second one from the junk collection agent if they can't be bothered to obey the law like the rest of us.

But what if I do not want to settle. What if I want to pay the full $500 (legally I owe this and ethically I want it off my shoulders). Should I just cal them up, tell them I am ready to pay and send payment? If not, what do I do if I call them....say TONIGHT?

I mis-read your posting. What you are saying is call them, tell them I am willing to pay but that they will have to send me a written notice that if I pay in full, they will remove the negative remarks from my credit score?

 

[AlienCraft]

Originally posted by: Ocguy31


Wasnt directed at you Stars. Only the person who advocates trying to weasel out of debt, which raises all of our interests rates, and even makes us bail them out with tax money now..

LOL, There is no way that challenging a junk debt collectpr's legal ability collect has impacted the sub-prime mortgage market or had any effect on credit default swaps.
You may not like it, but it's legal.
Let me remind everyone, I'm not saying not to pay if they have your signature, just don't be in such a rush, ESPECIALLY if they cannot legally collect.
You may be in a position to have the whole collection permanently removed, not just during the dispute period, which would coincide with your application.]

 

[AlienCraft]

Originally posted by: Ocguy31

Originally posted by: StarsFan4Life

If I pay these off and they still remain on my credit score (for 7 years from original collection date), but show as paid in full....will my score improve AT ALL?

Yes. The older the collection is, the less damage it does to your score. This means that the improvement to your score will also be a little less if it is old.

Your score will be calculated by the date the tradeline was opened, however. If the account was recently sold again and shows as a new collection, it will help more.

A charge off is a charge off. The Original Creditor's account is the biggest ding.
You are in damage control as far as your loan application is concerned. This is why you should dispute the collection agency and force them to either show their hand sooner rather than later. You still will have time to negotiate a settlement and release from them.
Actually, I believe paying it renews the date as far as the collection account is concerned and thus would not be removed for another period of time.
Here in California, it's only 4 years for open accounts (like a CC), not 7 like some would have you believe. Seven years is for secured accounts.

 

[AlienCraft]

Originally posted by: StarsFan4Life

Originally posted by: AlienCraft

Originally posted by: Ocguy31
They cannot be completely removed anymore by the creditor. You should call each one, pay them, and get a letter mailed stating that you have a 0 balance and the account is paid in full.

If you do this, without a letter in hand or a recording of them (the collection agency) agreeing to rectify your account on the credit Reporting bureaus, you'll be screwed, because it will just show as a late paid off in collections and they have no incentive to help you. The only time you have any power with them is before you pay. There is no authority from them if they cannot produce the validating documents.

Ther original creditor will always show this has "sold off to collections", so that ding is yours to keep.

What you don't need is the second one from the junk collection agent if they can't be bothered to obey the law like the rest of us.

But what if I do not want to settle. What if I want to pay the full $500 (legally I owe this and ethically I want it off my shoulders). Should I just cal them up, tell them I am ready to pay and send payment? If not, what do I do if I call them....say TONIGHT?

I mis-read your posting. What you are saying is call them, tell them I am willing to pay but that they will have to send me a written notice that if I pay in full, they will remove the negative remarks from my credit score?

EXACTLY !




But if you dispute them first, and they come back with nothing, you can save your money and get the marks removed. And it's all legal. That's all I'm saying about that.

 

[Viper GTS]

Originally posted by: StarsFan4Life

Originally posted by: AlienCraft

Originally posted by: Ocguy31
They cannot be completely removed anymore by the creditor. You should call each one, pay them, and get a letter mailed stating that you have a 0 balance and the account is paid in full.

If you do this, without a letter in hand or a recording of them (the collection agency) agreeing to rectify your account on the credit Reporting bureaus, you'll be screwed, because it will just show as a late paid off in collections and they have no incentive to help you. The only time you have any power with them is before you pay. There is no authority from them if they cannot produce the validating documents.

Ther original creditor will always show this has "sold off to collections", so that ding is yours to keep.

What you don't need is the second one from the junk collection agent if they can't be bothered to obey the law like the rest of us.

But what if I do not want to settle. What if I want to pay the full $500 (legally I owe this and ethically I want it off my shoulders). Should I just cal them up, tell them I am ready to pay and send payment? If not, what do I do if I call them....say TONIGHT?

I mis-read your posting. What you are saying is call them, tell them I am willing to pay but that they will have to send me a written notice that if I pay in full, they will remove the negative remarks from my credit score?

You need to get this quick fix idea out of your head. Do not call them. Not tonight, not ever. Everything you do needs to be in writing, and you need to instruct them to only contact you via USPS. You do the same, with delivery confirmation every step of the way.

Your basic line of defense is something like this:

1) Limited cease & desist (this keeps them off the phone)
2) Request for verification of debt (they have to prove they are legally entitled to collect) Remember - The burden of proof is on them! Not you! If they can't verify they have to stop collection attempts and reporting to the CRA.
3) If they have done everything properly offer PFD. This is your best chance at getting it removed.

This isn't going to happen tonight. If you want to deal with this properly it's going to take a while.

You admitting the debt is yours has absolutely no bearing on whether or not they are legally entitled to collect it. If you pay them and then get another call in a year from some other agency are you going to pay them too?

Viper GTS

 

[AlienCraft]

Originally posted by: kranky
I am fanatical about ethical behavior, but there's nothing wrong with using the law to defend your rights.

I don't want to derail this thread, but let's say I get a letter from XYZ Collection agency telling me to pay them $400. I might remember that I had an old outstanding bill from a local store for $200 and it might be that account. But it might NOT be. Maybe XYZ has a bunch of screwed up records and they want me to pay for someone else's debt. The law says they have to produce documentation to back up their claim, and they have to produce it if I dispute the debt. Maybe the local store I owed $200 to went out of business or simply wrote it off and I don't owe anything to anybody.

Nothing unethical about that. They should have to prove I owe the money. Why should I pay them anything just because they demand money, especially if I have never dealt with them directly? "Oh, we represent Megacorp and you owe us $400." Prove it. The law says you have to.

Yaayyyyyy! Some one that get's it!

 

[kranky]

Originally posted by: dullard

Originally posted by: kranky
I note you are writing, and what you wrote clearly indicates you read my sig. That's reading AND writing. You're not really illiterate, are you?

NO brochure for you! 😛

Yeaa, I get freee brocure!

OK, I concede. It's in the mail. 🙂

 

[StarsFan4Life]

Originally posted by: Viper GTS

Originally posted by: StarsFan4Life

Originally posted by: AlienCraft

Originally posted by: Ocguy31
They cannot be completely removed anymore by the creditor. You should call each one, pay them, and get a letter mailed stating that you have a 0 balance and the account is paid in full.

If you do this, without a letter in hand or a recording of them (the collection agency) agreeing to rectify your account on the credit Reporting bureaus, you'll be screwed, because it will just show as a late paid off in collections and they have no incentive to help you. The only time you have any power with them is before you pay. There is no authority from them if they cannot produce the validating documents.

Ther original creditor will always show this has "sold off to collections", so that ding is yours to keep.

What you don't need is the second one from the junk collection agent if they can't be bothered to obey the law like the rest of us.

But what if I do not want to settle. What if I want to pay the full $500 (legally I owe this and ethically I want it off my shoulders). Should I just cal them up, tell them I am ready to pay and send payment? If not, what do I do if I call them....say TONIGHT?

I mis-read your posting. What you are saying is call them, tell them I am willing to pay but that they will have to send me a written notice that if I pay in full, they will remove the negative remarks from my credit score?

You need to get this quick fix idea out of your head. Do not call them. Not tonight, not ever. Everything you do needs to be in writing, and you need to instruct them to only contact you via USPS. You do the same, with delivery confirmation every step of the way.

Your basic line of defense is something like this:

1) Limited cease & desist (this keeps them off the phone)
2) Request for verification of debt (they have to prove they are legally entitled to collect) Remember - The burden of proof is on them! Not you! If they can't verify they have to stop collection attempts and reporting to the CRA.
3) If they have done everything properly offer PFD. This is your best chance at getting it removed.

This isn't going to happen tonight. If you want to deal with this properly it's going to take a while.

You admitting the debt is yours has absolutely no bearing on whether or not they are legally entitled to collect it. If you pay them and then get another call in a year from some other agency are you going to pay them too?

Viper GTS

So if I write them to dispute it....do I dispute it through the collection agency or through the credit bureau's? Either way, what do I say in my letter to dispute this? Do I give them my current phone number and address? Do I require them to send me the information within 10 days? How does this work exactly?

If I just pay these off and get another call a year later or a notch on my credit score belt, I can dispute it with the credit bureau's at that point and take care of it then. It is illegal for collection agencies to try to collect on something that has already been paid....correct?

 

[Viper GTS]

Originally posted by: StarsFan4Life

So if I write them to dispute it....do I dispute it through the collection agency or through the credit bureau's? Either way, what do I say in my letter to dispute this? Do I give them my current phone number and address? Do I require them to send me the information within 10 days? How does this work exactly?

Initially you are not disputing it. Initially you are just saying "prove you own this debt." If they can't prove they own the debt then it's game over for them. You apparently skipped the part about no phone calls. Writing only. USPS Priority with DC is your friend.

Have you even bothered to visit CreditBoards? All of these questions are answered there complete with form letters you can use to accomplish the steps. You will need to do some additional research as well (for example, do you know what the statute of limitations is in your state?), but for the most part it's literally copy & paste.

If I just pay these off and get another call a year later or a notch on my credit score belt, I can dispute it with the credit bureau's at that point and take care of it then. It is illegal for collection agencies to try to collect on something that has already been paid....correct?

Only if you paid the right person the first time around. This is why the verification step is CRUCIAL.

Viper GTS

 

[StarsFan4Life]

No...I havent had the TIME just yet to go to Creditboards.com, I am just about to.

My next question is this. If company A sends my account to collections....do I contact company A or the collection agency? What if I don't know what collection agency it was sent to?

 

[StarsFan4Life]

I live in Texas. The SOL for Texas is 4 years. Does this mean anything on collections that is over 4 years old can be disputed and dropped from my credit score?

 

[AlienCraft]

Originally posted by: StarsFan4Life
No...I havent had the TIME just yet to go to Creditboards.com, I am just about to.

My next question is this. If company A sends my account to collections....do I contact company A or the collection agency? What if I don't know what collection agency it was sent to?

If Company has sent it on, you contact the one who holds your paper. Check the credit report. You will find it there.
The only time you contact the original creditor is if the collection agency is an affiliated company of the OC.

Thanks to ViperGT for checking in here. It was he who originally sent me to creditboards.

 

[StarsFan4Life]

I have a thread going over at Creditboards....so thanks for that information.

Now, on my credit report, the accounts show the original creditor, the amount I owe...then each say submited to collection. How do I know who to call as the collection agencies are not on here..

 

[StarsFan4Life]

Can I get a couple of quick replies on the following questions:

1. Can I improve my score by paying the smaller collection amounts first by contacting the collection agency and paying in full?

2. Can I pay these off and have them removed from my credit score quickly?

3. Can I pay these off, still have them show on my credit score but show as "paid in full", but still improve my credit score?

4. Can I contact the original company to see who they sold the account off to so I know I am contacting the correct collection agency?

5. Can I do this over the phone/by email or do I need to do eveything through certified letters (won't this take forever)?

6. How fast can I turn around a PFD (pay for delete) and will it improve my credit score?

7. If I do request a PFD, can I contact the credit bureau's and dispute the negative accounts? If I do this, will it temporarily remove these accounts from my credit score so I can continue with the FHA loan?

The loan officer said if I can prove I have paid in full, they can re-do my credit score to get me approved. Is this true?