Paid vs unpaid collection account is one better than the other since they both still report as neg on report?

Question

Paid vs unpaid collection account is one better than the other since they both still report as neg on report?

Answer 1

Yes and no. In the sense of will paying a collection account physically raise your score the answer is no. In fact it may actually lower score as it would show recent activity on a delinquent account. It may help in some cases like a personal banker that may look at more than just your score. If you are going for a personal loan they may see your recent attempts to take care of past debt an see this as favorable. When paying a collection agency, i recommend paying them only if they agree to take the item off your credit report. This may be hard or easy obviously depending on the agency. Whatever you do get any agreement to pay them that you make in writing. Again having a paid collection account on your credit report does nothing for your score. If they won't delete it, your better off waiting till the statute of limitations is up on the account and having it fall off your report in seven years. Hope some of this helps!

Answer 2

Paid is better than unpaid....but a paid collection is still a negative item.

Answer 3

As far as your credit score is concerned, the effect of paying an unpaid collection will not improve your score and may actually hurt you. They are both inherently negative.

However, leaving a collection account unsatisfied may open you up to a lawsuit for the remaining balance owed, if the balance owed is significant.

Answer 4

Paid collection account is always better then unpaid collection. but a collection account on your credit report is negative doesn't matter if its paid or unpaid. but if you trying to get a loan in the future the creditor or lender will take into account that you at least paid off the collection account. good luck.