Question by Sage: How does account settled for debts in collection affect your credit?
When a negative item in your credit report is settled because you paid it off, how greatly does your credit increase as compared to if if still not settle and in collection? Can the “been settled” be completely removed from the report?Is it better to pay off the debt in full or settle for less? How significant is this to determine the FICO tally (settle in full or settle for less?) Please assist, thank you.
Best answer:
Answer by ∞infiniti∞
It is always better for you to settle for less. Make sure you two things in writing first from the collection agency.First, make sure that your the settlement amount constitutes “payment in full”. Otherwise, the collection agency could later come after you for the balance. Second, get a “pay for delete” agreement with the collection before you pay them a dime. A derogatory trade line is still a derogatory trade line even if it is paid in full or settled.
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