Is it Better to Settle a Collection Account or Pay it in Full? – Credit Card Insider

Today's question is: Is It Better To Pay A Collection Account Or Settle It? How Will This Affect My Credit?

What's the right move when you're being hounded by a collection agency? Should you settle the debt or pay it in full? Unpaid collection accounts will also appear on your credit report, damaging your credit score. What's the best way out of this situation?

Every week, John Ulzheimer answers YOUR credit questions. Leave a comment, email us, give us a call, or ask on live chat, and we may answer your question on YouTube!

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[seymourjackson]

So good to finally see a straight no bs credit info( no snake oil nonsense ) thank you

[Surfer]

Pay to delete absolutely works. I had a medical bill from 5 years ago . After calling the collection agency, they offered me a pay to delete. They issued me a certificate of deletion, and a day later, the derogatory account was removed from all credit reports.

[fredastaire]

Wow! This is good news. I didn't know about the new FICO scoring models to not count zero balances in generating your score. Good to know.

[asuhadude]

The collections I spoke to did not want to work with me.i even spoke nice to the agent.He started going crazy and saying he didn't care.wanted my card info without sending me paperwork to confirm.

[Riddem]

You helped a lot. Thanks. Definitely invited to the cookout!

[epicsseven]

I'm surprised about the information that you gave about collection agencies can't remove a negative report, due to the resistance from the credit bureaus. I've had items removed in the past, as well as had something removed last week and my score shot up almost 40 points. So that is not true

[Lulu-gbit]

Wow i was once advised by a credit agent to not settle nor pay in full because it Will damage my report further. And it will remain on the report an additional 7 years. Now im hearing it will not effect the fico scoring system. News to me. Thank u for this video

[johnlundy]

Ty so much great info on 0 balance report.

[dominiqueward]

Thank you for the information, it helped a lot!

[kellyjenson]

The collection agency will say rhey will DELETE, but when u pay they will also send you a letter stating this! With the letter you can still get it deleted! Or sue there butts downtown!!!

[brianbatiste]

I had to debt settlements that I paid off due to trying to purchase a home I was told this by my realtor and loan officer that's also been in underwriting for 20 years one debt was $600 for credit card they took a settlement of 350 the other one was a electrical bill for 400 they took a settlement for 257 I just want to know did I make a good Sound Decision because I don't want to lose money on home purchase if everything doesn't fall in line would deeply appreciate your response to my question

[Myriad]

Doesnt seem like this works on student loan debt that has gone to collections.

[BonJovi]

Question: I contacted my original creditor, discuss about the settlement, they agreed to reduce the bal from $1002 to $500 about 50% but when I asked for "Pay to delete" the Original creditor credit card bank said: we are not allowed to delete but If you agreed to the settlement of $500 and paid it, we will report as "Paid as agreed, settlement less than full amount, balance 0" what should I do?, should I go ahead to pay it to settle at 50% but if they do not agree to delete, it will still show up on my credit reports, but do you think that my credit score will go up with zero balance?. Please help me with advice thank you very much.

[oloveaklove]

Every single account I paid I asked thr collection agency to remove after paid they did it

[jeremy]

I'm trying to figure out the best way to settle a court ordered credit card dept. There only getting my state tax once a year for maybe 100 bucks but I'm finally in a situation where I can pay a lump sum to them any thoughts thanks

[laneitacartwright]

If I settle my collection for less, will it state on my credit report, paid but settled for less. How will that look to lenders.

[anewvisionforhaiti]

How long can late payments continue to hurt your score

[TheShelbyCamperVan]

Hi, do you recommend negotiating a PFD Pay for deletion letter from the collection agencies?

[taylormade]

Thank you so much for this video, very helpful

[stonesthrow]

A collection agency wants $1200 for an apartment dept. It is already 2 years old, so I called them and offered $600, which is half. They said NO WAY. They can only settle for $1100. They wont budge. Any advice?