Busting Myths: "Paying off a collection debt re-ages it on your credit report."

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The Fair Credit Reporting Act prevents negatives on our credit reports from appearing beyond 7 years. Is there a legitimate way for more time to be added?
And if so, can you prevent it?
SHARE THIS VIDEO: • Busting Myths: "Paying...
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Michael Bovee started CRN in 2004 with a mission to provide people in need with detailed credit and debt help. The DebtBytes Channel is an extension of the CRN blog, and is dedicated to finding the debt relief option or strategy that works best for you.

Опубликовано:

12 сен 2024

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Комментарии : 28

@alvindowd5232 3 года назад

Thank you for this video

@kreatingkonfidence2025 3 года назад

If an account is showing charged off by the original lender, it should be showing $0 balance owed? What do I do if it is not showing $0 owed, but instead whatever the end balance was?

@MichaelBovee 3 года назад

If your lender charged your account off, and then sold it to a debt buyer, that is when it would show the negative, but with a zero balance owed. If your lender charged your account off, and still shows a balance owed to them, it typically means the debt was not sold (most debts are not sold).

@lamontmorgan99 3 года назад

Thank you for your videos, I have a quick question: I just paid off an account I had owed and was charged off about a year and a half ago, it was for $2,505. It was a personal loan from Check n Go, which is owned I believe by Capitol LLC (have to double check) I requested documentation as proof of my payoff and I got a letter from the lender stating they would notify the credit bureaus that I have a zero balance owed and notify them of my paid in full status. So that’s good but Does this mean my credit report will now delete the debt from my history? Is it still on my report for another 5.5 years? If it’s still on my report, in 5.5 years will I see a jump in my credit score once it’s fallen off cus it was paid off?

@MichaelBovee 3 года назад

It is difficult to say what a single thing will do to someone's credit when it is not mine, and I do not know what it looks like today, or over the next 5 years. If they are not going to delete it, it should show as a paid collection until the 7 year mark from when you stopped paying. Your credit will bounce back well before it falls off 5 years from now, if this is the only negative, and may only get a small bit better when it falls off, as it will be even more stale of a paid negative that far in to the future.

@jcbailey2000 3 года назад

Michael - I have an old debt that was charged off years ago. Bought and sold to Calvary. Over the years this same debt popped up by different collection companies with Calvary as owner of the debt. The debt turns 7 from the original late this coming spring. I haven't paid on this one. It is long past SOL in my state. Is it true that if I do nothing, it will fall off my credit report this spring - even though it is now Calvary and only showed up on my credit report about 18 months ago?

@MichaelBovee 3 года назад

Yes, the debt buyer should be deleted from your credit the same time as the original creditor, and regardless of their only reporting for the past 18 months. No one is monitoring this for you, so be sure to check that they all get removed from your credit. Post an update if that does not happen and we can go from there.

@FoodStampzzzz 4 года назад

Ok.. paying Original Creditor doesn’t Remove from Report... so is there a Point/Advantage in actually Paying at all once Negative hits your report.?

@MichaelBovee 4 года назад

The benefits include removing lawsuit risk and improving credit. People with paid collections on credit reports can still get mortgages and car loans at very competitive rates.

@FoodStampzzzz 4 года назад

Michael Bovee thank you

@jonathonoberjonnyober7582 3 года назад

Hi Mike I'm Jon I just subscribe to your videos I think I got what you're saying but my question is I settled three separate collections from the same collections company they are not on my initial report anymore as derogatory although when I go into full report they still show up as closed account I have been thinking that I should get them deleted completely but seemingly hearing you say that doing so may not even help my score correct ??? Thanks in advance

@MichaelBovee 3 года назад

Who is the creditor or collector reporting? When did you stop paying the debts?

@jonathonoberjonnyober7582 3 года назад

@@MichaelBovee it was originally Quest Diagnostics then it went to credit collection service and I settled probably a year ago. $330 $350 $330 can remember what I settled them for but I've been thinking about paying for deletion bc it may no be as much as I think after settling you know... 🤔😅

@MichaelBovee 3 года назад

Paid collections are better than unpaid ones on your credit. What are your credit scores now? Do you recall what they were prior to settling? Do you have a major credit and finance goal in the next 12 to 24 months?

@jonathonoberjonnyober7582 3 года назад

@@MichaelBovee my score was pretty low like 512 ck b4 I settled and now I'm at 649 ck but like I said there all reporting it as negative but closed and it's legit it is.. I am! I trying to buy my 1st home! And have come along way but I'm so close to have such a better rate... maybe I should rent another yr yet while I try and clean it up some more & allow my 2 sucred cc payments start adding up....?? Ty so much for your advice and concern I really am a good person just made some mistakes in my 20s smh

@MichaelBovee 3 года назад

If you were to dispute the accounts and luckily get them removed, that would help a ton. If they are not removed, your score is still within range of getting a home loan. You could get your loan today at whatever rate, and refi to a better rate later. Keep in mind that rates may be higher later, so it may be the same thing as waiting a year.

@DingoTheDemon 3 года назад

Hi Michael, Recently I found out that my S.O. had been getting letters from debt collectors. He has a bad habit of outright ignoring his mail, so the first notices from the debt collectors were well past 30 days ago. Some of them he confirmed were legitimate and we are making plans to settle the debt. However, one of them alleges that he had an unpaid debt from an online lender, but neither of us have heard of the lender and he doesn't remember ever going through that lender. I know that collectors are required to send you proof of debt validation if you request it within 30 days of their first contact with you, but can we request validation after 30 days? Thanks in advance.

@MichaelBovee 3 года назад

Most will still provide you details if they still want to continue collecting. Who is the online lender? Who is the collection agency?

@DingoTheDemon 3 года назад

@@MichaelBovee The online lender is WebBank. According to my S.O.'s credit report, it is being held by Absolute Resolutions Investments LLC, but the letters were sent by Stenger & Stenger, P.C., who confirms that ARI is the current creditor in the letters.

@MichaelBovee 3 года назад

Web Bank funds many of the peer to peer, and other online lenders. Did he take out a Lending Club loan, or perhaps Prosper? What about Best Egg, Net Credit, Avant, or something like that?

@DingoTheDemon 3 года назад

@@MichaelBovee Yes, we made some calls and found out that he used Lending Club, and they told us that the debt was in fact sold to ARI.

@MichaelBovee 3 года назад

I deleted the other posters comments. The premise of what he is saying, where you can force the other side to prove their claim, is valid, but the way that commenter, and many others suggest you view the situation, and how to implement it, is not all that productive when Stenger and Stenger are already involved. Requesting validation is not a bad idea, though it will accelerate their preparing for a lawsuit (not ARSI, but the law firm). Is your goal to settle the debt, or something else?