Old Debt Collection

I lost my job a few years ago and has suffered much of the credit card debt that eventually go outside collection agencies. In the past year, I have either paid or settled all my accounts with the exception of two. However, this did not help my credit score a bit. My question is: what is the incentive to pay these accounts if it will not help my score? It is tempting to let them rest until 7 years are up, then they will fall.

In fact, you're right ... the credit rating system in regard to credit card debt charged off creates a major disincentive to repay. There are people on this forum who will tell you that this will help your credit score ... but these are the people who work for the collection industry.

There are three reasons why you might consider a refund account charged-off:
1) You are applying for a new mortgage, loan or an apartment and the creditor is insisting that all items be paid by default
2) There is an action in court confirmed the pending debt
3) You are applying for a job where they need to see all the faults paid.

If none of these apply, then it is often better to take a "Do not Ask / 't Tell" approach ... Stay put and let the burden fall-off your credit course in 7 years. The main damage of the load-off your credit should be over in 2-3 years.

Once again I hate to inform you, but excl damage not end in 2 to 3 years. It takes 7 years 1 / 2 whatever!
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The incentive is that "paid" is far better care, even if the debt went to collections.

The other outstanding debts are what your scores are now so they're paid less regulation is not good either. You also have a debt problem is still going to be reported by the original creditor as a compensation cost will remain for 7 1 / 2 years after the date of last missed payment.

BUT, over time by the old debts paid less weight and lenders will be ignored because they are not recent.

Time is the healer of all credit scores.

Hope this helps answer your question.

You have a misconception - your credit does not start getting better if you ignore those 7 years. It is never better. Your credit is screwed for 7 years * after * you have fully paid everything off. All cards / debt that you mention that you've already paid? These are all major brands against you until 7 years after the time you paid. The two most remarkable are still hurting you, and will continue to do so until 7 years after you have paid.

There is no incentive at all. In my opinion one of the biggest problems in the credit sector. A collection can pay "best appearance" of a manual review, if you apply for a mortgage, for example, but it makes a little difference to your credit score. Even over time. It will hurt until the last day of the period of 7 years of statutory declaration

Before you pay a bill collector, I recommend you check if the statute of limitations still in place, if a collector can not sue you for debt, without violating the FDCPA. Also, if the account is now in the hands of a purchaser of debt you need to check if they really own the debt and they are entitled to get money from you, ask them you throw their purchase contract, without you do not own them anything.

99% of requests from buyers of debt to drain the court if an attorney represents the consumer, they get away with it every day simply because the gen.