Do I want to pay a collection agency, even if negative info will not be taken off my report?

Question

First of all, please do not repsond if you do not know what you are talking about. ive seen many similar questions on here, and everyone seems to think differently about situations regarding credit reports and the law.

Now then, to make a long story short, a collection agency has taken over a $250 bill from a cell phone company. Ive tried to negotiate with them, offering a FULL payment in exchange for removal of negative info on my report. however they said that after the bill is paid, it goes back to the cell phone carrier, and THE CELL CARRIER posts the write-off as "Paid". The agency, therefore, stated they themselves cannot remove anything from credit reports. So, I called Verizon, and they refused to REMOVE negative information, and stated that it will be updated to read "PAID". Is someone lying here, and which company legally has "the right" to remove the info from my report? AND, should i even pay if they refuse to remove info and only update the report to read "PAID" instead of "WRITE-OFF". and will that increase my score? Now then, that should be sufficient information, any help would be greatly appreciated...thanks in advance

Answer 1

Had a similar problem with a medical bill I was previously unaware of.  I was able to negotiate the fee down from $2300 to $800 (still think I was in the right, but it wasn't worth hiring a lawyer).  I thought things were ok, but they left it open on one of the credit reports...found this out when buying a house.  Had to make some calls to credit report agency, and they called the collector and confirmed it was paid off.  But it stayed on my record for a 5 years .  I heard this is a collection agency trick when they 'settle' with a client.  Those folks are RATS!

Answer 2

First, it might be possible that Verizon still owns the debt but I doubt it.  Normally they sell off to collection agencies, not just hire collection agencies.  Although that could be changing.

The only one who can remove a derogatory item is the one who put it there.  Phone companies typically do not report to credit bureaus.  It is normally the collection agency that makes those reports.

Paying a derogatory item won't improve your score unless the item is completely removed.  The damage is already done to you score.  However, creditors look at your whole credit report, not just the score.  Paid old debt always looks better than unpaid.

I suggest that you wait 2 months and then send the collection agency a certified, return receipt letter offering to pay half if they will delete the item.  Specifically say that you are not acknowledging the debt but are making the offer to expedite removal from your credit report.  Ask that an authorized ageny of the collection agency sign an return a copy of your letter indicating acceptance of your offer.  Put lines at the bottom for signature, date, and print name.

They might accept it or at least give you a counter offer.

By the way, an account maked "paid in full" is only very slightly better than "settled".

Answer 3

The collection company is the one lying here, they have the ability to remove their negative information from your credit report.

Without a pay for delete agreement paying old collections does' nothing to help your credit score it actually lowers it because when you pay it makes the account current rather then old.

I don't know how old this is but look at it this way, there is no way they are going to sue you over $250.00 so if they refuse to grant the pay for delete agreement just let it age off your report.

Answer 4

Here's the deal:  If you pay it, the negative report will still be there for at least three years because the bill was taken to collection.  There's nothing the collection agency or Verizon can do about that.  If you don't pay it, not only will the bill stay on the collection report but they can take you to court for the $250.00 plus the costs of collection.  That will make your credit score go down.

P.S.:  Do you live in California, and is this $250.00 bill in collection an early termination fee?  Yesterday a state judge ruled that early termination fees were illegal...

Answer 5

If that one bill is worrying you you have more problems than you stated.  Different states have different laws.  I am in Wisconsin and was advised to go to the entity that I owed the ($100) to and pay them.  The collections agency could take the money and then 'loose' your information.  If the entity refuses to mark paid, then you have a case in court.  As for removing it from your credit report I think you should be worrying about the other stuff that makes your report look bad.  Most people making use of credit reports are not worried about a little late bill.  They want to see history and are concerned about big amounts of money owed to single sources.  

You may have to go to a credit councilor and pay them to help you clean up your report.

Once clean, pay your bills and pay them on time.  Its not just an inconvenience on you it raises the cost of goods and services for the rest of us.