Question about an old collection acccount?

Yesterday I pulled my credit reports from all three bureaus and discovered that on one report there was an old collection account. I called the collection agency and discovered that it was for an old credit card that I defaulted on. The origincal credit card is listed with all three bureaus as closed. I learned that the original credit card was closed 1/4/01 and that the collection agency got the account in 2004. My question is will it take seven years from the 2001 or 2004 date to "fall off" my credit report? Also, the amount is nominal (but it wasn't in 2001 to a starving student) that I would pay it now if it would help my credit. Good move or not?

Jonasz! Who are you really???? No self respecting collection agent would ever tell so many truths!

Come into the light! LOL!

Jonasz is absolutely correct! Let me answer your questions...and I actually have references to show you...something nobody here want's to supply.

The Fair Credit Reporting Act states that negative information can not be reported on your credit for more then 7 years, beginning on the date of the delinquency. You say it was "charged off" in 2001, but usually by the time they close your account and charge it off, several months have passed.

The delinquency date is the day you owed on the bill. So for example, if you bill was due 6/1/00 and you didn't pay it, THAT is the credit reporting date. Usually they harass you for 2-3 months, then send it to a collection agent who will harass you some more. After 6 months the charge it off. I'm betting if you go through your old records, you will find the real date, and you can insist that this be deleted 7 years from that point.

It's very important to know this date! Many collection agencies will buy old debts and change the reporting date. This is illegal! And if you catch them doing it, you can sue them for $1000 in small claims court.

Another thing people confuse is the "credit reporting time" and the "statute of limitations" time. The SOL is the legal timeframe that the creditor has to file a lawsuit or take legal action against you. After that time has run out, they can no longer sue you in court. You no longer have a legal liability to pay this debt.

Read the links I've supplied below for information on this.

Note that if you pay this debt, it does NOT get it removed from your credit report. All they will do is change the status to "paid" but all information about collections, late fees, and charge-offs remain. It does NOT help your credit.

And to make it worse, as debts get older they do not play as much a factor on your credit. Recent debts do. When you pay on an old debt, you now change that status to recent, and it hurts your credit!

Finally, let me address this chatter about "doing the right thing" and paying off your debt.

When you stopped paying, the creditor gave you a choice. Pay your bill or they will trash your credit for the next 7 years. Well, you didn't pay, so they have had this posted to your credit. Now you want to pay this debt??? Why? You already paid it with 7 years of bad credit!

Ignore it....wait the year for it to drop off your history. It's too old for them to sue you. Relax!

Do not pay the bill off, it will not help you in the least bit. It will reage the debt on your credit and you will see a huge fall in scores. Depending on which state you are in it is probably out of the statute of limitations which means they can no longer take legal action against you to get the money so why pay and ruin your scores. It sounds bad but when you are trying to repair credit you have to learn your rights and what to do and what not to do. A lot of people here are just stating what they THINK will happen and have never had a derogatory mark. Go here and learn your rights, a debt this old is usually fairly easy (not always) to get off your credit. www.creditboards.com

1. 7 years - more for some kinds of debt - from the time the debt was incurred. HOWEVER, if you enter into any kind of payment agreement, that clock will start over. Just paying them without agreeing to a formal schedule will not start the 7 year clock over again.

2. It's always good to pay off your debt. It will be off of your conscience, and you'll improve your standing with that particular business. You never know - you might need them again some day.

3. Even when an account "falls off" your credit report, you still owe that company the money. The debt doesn't disappear; they just can't keep reporting it to the credit bureau. It's still fine for them to try to collect or to farm out the account to collection agencies. (Don't make any deals with them, either.)

4. Even if the amount is large, do what you can to pay the debt down. Send a check for five or ten bucks each month, and keep records. The credit agencies can see or request original and current balances, and you'll get credit for making payments.

Do not pay the account. It should state on your credit report the date it will fall off. It will most likely be the date the account was closed. Since the account is 6 years old, it will fall off within the next year. If you pay the account or verbally agree that you will pay the account, the time will start all over again.

Pay it off, it is your debt. If you don't it will haunt you for ever. It is already making you pay higher intrest on any credit you get. Pay it off and request that it be removed.

The moral thing to do would be to pay it.

and yes it will help your credit too.

OMG!!!! Half of these people give the most horrible advice!!!
The 2001 date is the date that counts. It doesn't matter when it was handed over to collections. If it's a small amount they will not try to get a judgment against you. Finally, don't pay it, all that will do is extend the time that this remains on your report.

Good move, bad move?? Paying off an old collection, more than 4 years old may not help your score as much as you would like. Even after paying it off, it will still show on your report as once being delinquent. My advise would be to call the collection company and offer to pay 25% of that collection and show as paid in full. Make sure you you write down who you spoke to, day and time you spoke to them and their ID # or extension #. Have them fax and/or mail you proof of this agreement and proof of paid in full when you pay it. Then send the letters to all 3 bureaus, Experian, Equifax, and TransUnion. Keep that letter until you are sure this has been removed from your credit and has stayed off for at least 3 years. Good luck

if it's with a collection agency you will need to pay that off before it becomes a judgment on your credit and then that will make your credit even worse.

The collection will not start going off your credit until it is paid.

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