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Debt collections and credit score- please give advice!
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evi




 
 
    
 

Post Sun, Aug 15 2021, 11:59 am
NotInNJMommy wrote:
Pay your bill and then ask them to remove it.


Don't do this. First ask them if they will remove it if you pay, don't first pay because then you have no leverage.
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evi




 
 
    
 

Post Sun, Aug 15 2021, 12:01 pm
Paid collections that are non-medical definitely stay on your record (for 7 years) even after you pay them, unless you get the collections agency to remove them.

Medical ones may have special laws (now - it's pretty recent that they made special laws for medical ones), but I wouldn't rely on that alone. Get them to agree to remove it entirely first.
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amother
OP


 

Post Sun, Aug 15 2021, 12:07 pm
amother [ Phlox ] wrote:
OP- Yes, paying a collection WILL remove it from your credit score.
When you pay the bill, ask for a receipt from the debt collection agency that confirms the bill is paid in full. Confirm that they will report the paid bill to all the major credit reporting agencies. (FICO, Experian etc)

In addition to the above, you can log into your credit and report the collection as “paid”. The agency will then start an investigation, find out that this is correct and remove it from your negative delinquency.

And YES- your score will 100% go back up after it is successfully removed. No one can see this collection after it has been removed - your score is wiped clean.

The 7 years thing is completely unrelated to this. Hard credit pills (for example when you apply for a loan from the bank, or lease a new car they do a hard credit pull) stay on your account for 7 years. You don’t want too many of these “hard pulls” as it shows you are desperately searching for someone to lend you $. Not a good sign for a potential lender.

All of these factors make up your credit score, each contributing a specific percentage. Any more questions feel free to ask! I’ve been working on this for years. Good luck!


You do this as part of your career field?

So some people here, and research online are telling me that on my credit reports it will be marked as "paid" and my score will go back up but it will still show on my credit report that I had this delinquency at some point. Do you know if that is the case?

Even if the credit bureau websites they say that this is the case for unpaid debt. That it will just show that it was paid but it won't be deleted from the record that it happened.

And for everyone saying to get it in writing- they told me they don't do that. They will only give me a receipt saying I paid it.... (And they claimed they will report to the credit bureau that it has been paid).
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evi




 
 
    
 

Post Sun, Aug 15 2021, 12:20 pm
amother [ OP ] wrote:


And for everyone saying to get it in writing- they told me they don't do that. They will only give me a receipt saying I paid it.... (And they claimed they will report to the credit bureau that it has been paid).


If it were me I would next send them a letter offering "pay for delete". It's possible the minimum wage representatives don't know what they are talking about whereas if you send a letter it might get to someone a little more experienced.

Google "pay for delete".

Re the person with experience claiming 7 years has nothing to do with it, I had a paid medical collections (before the special laws about medical ones were implemented) and it stayed on my record (while paid) for about 7 years. Not sure what they are talking about.

The collection agency will definitely mark it paid once paid, with or without an agreement, they are not going to lie that blatantly. 10 years ago, having it paid would not have removed it. It's better than unpaid but still a big black mark on the credit score.

Or you could gamble that the new laws will help you and pay it and hope it will get removed entirely once paid due to its being medical....
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Just One




 
 
    
 

Post Sun, Aug 15 2021, 1:11 pm
This might help explain some things

The other day, while I was praying, a beggar passed by asking for Tzedakah. I threw in a dollar. The beggar was excited and gave me the following blessing; “May you never have any doctor bills or hospital bills”. I thanked him but did not put much thought to what he had said.

However, standing next to me was an old fellow. He looked up and said to me, “Oh! What a beautiful blessing that was! It really would be great to live life without any doctor bills”.

I shall now bless my readers with the very same blessing.

In this post, we will discuss what you need to know if you unfortunately do get hit with a doctor bill and it goes for collection.

Medical collections - the threat
Usually, the biggest threat the medical collectors will use in order to convince you to make payments is that they will report the medical collection on your credit report. That in turn, will affect your credit score.

But is that true? Do medical collections get reported right away, and do they affect your credit score?

Medical collections - 180 Day Grace Period
Sometimes, a medical bill does not get paid due to the fact that the insurance did not kick in yet. Therefore in reality, it has nothing to do with the consumer. For this reason, in 2017, congress issued a law that medical collections cannot appear on your credit report until they are 180 days past due.

Many people confuse the grace period with thinking that the medical collection cannot be reported at all on your credit report. That is wrong. Medical collections can definitely show up on your credit report after they are more than 180 days past due.

Special medical attention
The newest Fico score (Fico 09) and the newest Vantage score (Vantage 04) give medical collections special attention. A medical collection will not affect your credit score as much as a non-medical collection. Also, with the Fico 09 scoring model, a paid collection will never affect your credit score.

But the issue is that, unfortunately, most lenders at this date, do not use the newest scoring models. DU requires mortgage lenders to use the Fico 04 scoring model. All credit card issuers, as far as I know, use the Fico 08 scoring model. With auto loans, I have seen Mazda/Chase use Fico 09, but most still use Fico 08.

Fico 08 and Fico 04 do not give any special treatment for medical collections. Therefore, a medical collection will affect your credit score just like any other collection.

Small dollar amount collections
It’s important to note that any collection under $100 does not affect credit with the Fico 08 (most often used) scoring model. The Fico 04, which is used for mortgage loans, does factor in even small collection amounts into the scoring model..

Not all collection companies report collections
Not every collection company will report an unpaid collection on your credit report. You can double check with the collection agency by asking them if they are a reporting collection agency or a non reporting collection agency.

Conclusion
So, to sum it up, based on the scoring models currently in use by most lenders, medical collections will affect your credit score just like any other collection mark. But you do have the 180 day grace period before it can get reported on your credit report. In this 180 day period make sure to either have your insurance pay the bill or at least negotiate a fair settlement with the collector. Often, the collector will be willing to settle for pennies to the dollar.

When dealing with any collection agency, it is important for you to know your rights. Read more about your rights under the FDCPA and NYC collection laws, here.
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amother
OP


 

Post Sun, Aug 15 2021, 3:46 pm
Just One wrote:
This might help explain some things

The other day, while I was praying, a beggar passed by asking for Tzedakah. I threw in a dollar. The beggar was excited and gave me the following blessing; “May you never have any doctor bills or hospital bills”. I thanked him but did not put much thought to what he had said.

However, standing next to me was an old fellow. He looked up and said to me, “Oh! What a beautiful blessing that was! It really would be great to live life without any doctor bills”.

I shall now bless my readers with the very same blessing.

In this post, we will discuss what you need to know if you unfortunately do get hit with a doctor bill and it goes for collection.

Medical collections - the threat
Usually, the biggest threat the medical collectors will use in order to convince you to make payments is that they will report the medical collection on your credit report. That in turn, will affect your credit score.

But is that true? Do medical collections get reported right away, and do they affect your credit score?

Medical collections - 180 Day Grace Period
Sometimes, a medical bill does not get paid due to the fact that the insurance did not kick in yet. Therefore in reality, it has nothing to do with the consumer. For this reason, in 2017, congress issued a law that medical collections cannot appear on your credit report until they are 180 days past due.

Many people confuse the grace period with thinking that the medical collection cannot be reported at all on your credit report. That is wrong. Medical collections can definitely show up on your credit report after they are more than 180 days past due.

Special medical attention
The newest Fico score (Fico 09) and the newest Vantage score (Vantage 04) give medical collections special attention. A medical collection will not affect your credit score as much as a non-medical collection. Also, with the Fico 09 scoring model, a paid collection will never affect your credit score.

But the issue is that, unfortunately, most lenders at this date, do not use the newest scoring models. DU requires mortgage lenders to use the Fico 04 scoring model. All credit card issuers, as far as I know, use the Fico 08 scoring model. With auto loans, I have seen Mazda/Chase use Fico 09, but most still use Fico 08.

Fico 08 and Fico 04 do not give any special treatment for medical collections. Therefore, a medical collection will affect your credit score just like any other collection.

Small dollar amount collections
It’s important to note that any collection under $100 does not affect credit with the Fico 08 (most often used) scoring model. The Fico 04, which is used for mortgage loans, does factor in even small collection amounts into the scoring model..

Not all collection companies report collections
Not every collection company will report an unpaid collection on your credit report. You can double check with the collection agency by asking them if they are a reporting collection agency or a non reporting collection agency.

Conclusion
So, to sum it up, based on the scoring models currently in use by most lenders, medical collections will affect your credit score just like any other collection mark. But you do have the 180 day grace period before it can get reported on your credit report. In this 180 day period make sure to either have your insurance pay the bill or at least negotiate a fair settlement with the collector. Often, the collector will be willing to settle for pennies to the dollar.

When dealing with any collection agency, it is important for you to know your rights. Read more about your rights under the FDCPA and NYC collection laws, here.



Sooo we are trying to get a mortgage loan. So they will use the old model. Which means it will still show up once paid?

So I guess my safest bet is to write the letter asking for them to delete it like another poster suggested. And hope for the best. But I guess expect the worst.

🙁
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