Some questions from my recent AMA (Ask Me Anything) on Reddit.

Does paying off old debt in collections help your credit score?

When is pay-for-delete a thing?

What is the difference between the statue of limitations for debt collection, vs. the length of time derogatory items can appear on a credit history? And why people should care.

Answers:

Old debts in collections: FICO has shared that you have nothing but positive credit, you’re on one of three scorecards within those models. If you have negative items, you have 12 scorecards. If you have collections, you’re on the scorecard with collections. If you have late payments, you’re on the scorecard with both.

What that means is that as long as you have those items on there, there’s sort of a glass ceiling built into the algorithm…your positive payment history can only count for so much. Having paid collections is better than unpaid and allows your positive payment history to count for more.

But there are lots of times when a third party debt collector can’t prove they own the debt, so make sure they do is better than paying them off. Sometimes you will pay them off and they don’t even own the debt and the remarks remain.

John Oliver had a cool piece on this that got a lot of publicity….but I doubt those debt collectors actually could collect on those debts.

Pay for delete: It’s when you and the collector/creditor agree that if you pay, they will delete. It’s technically against their contracts and agreements with the credit bureaus, so don’t be surprised if they don’t agree to do it or won’t do it in writing.

Usually, after you pay, if you challenge it to the bureaus directly, the collector won’t respond and it will fall off.

The bureaus will only investigate one code twice per year, so if you’ve already said “it’s not mine” they won’t investigate under that again for 12 months.

Derogatory remarks/items can stick around for 7 years plus 180 days past the first date of default. So if it’s a charged off credit card, it will fall off after the first missed payment. I see them fall off earlier though, especially if you challenge around year 6 or try to get some details from the creditor and then they don’t respond.

The statute of limitations varies by state, but it goes back to the John Oliver thing. The older the debts get, it’s more unlikely they are actually owned by whoever is collecting them. They are bought and sold in excel spreadsheets with your name and SSN and no other details.

I often see in fine print “we can’t sue you for this” in fine print on these notices.

In my personal and professional opinion, if they can’t sue you, they can go fly it.

#CreditWithCassie

Some questions from my recent AMA (Ask Me Anything) on Reddit.

Does paying off old debt in collections help your credit score?

When is pay-for-delete a thing?

What is the difference between the statue of limitations for debt collection, vs. the length of time derogatory items can appear on a credit history? And why people should care.

Answers:

Old debts in collections: FICO has shared that you have nothing but positive credit, you’re on one of three scorecards within those models. If you have negative items, you have 12 scorecards. If you have collections, you’re on the scorecard with collections. If you have late payments, you’re on the scorecard with both.

What that means is that as long as you have those items on there, there’s sort of a glass ceiling built into the algorithm…your positive payment history can only count for so much. Having paid collections is better than unpaid and allows your positive payment history to count for more.

But there are lots of times when a third party debt collector can’t prove they own the debt, so make sure they do is better than paying them off. Sometimes you will pay them off and they don’t even own the debt and the remarks remain.

John Oliver had a cool piece on this that got a lot of publicity….but I doubt those debt collectors actually could collect on those debts.

Pay for delete: It’s when you and the collector/creditor agree that if you pay, they will delete. It’s technically against their contracts and agreements with the credit bureaus, so don’t be surprised if they don’t agree to do it or won’t do it in writing.

Usually, after you pay, if you challenge it to the bureaus directly, the collector won’t respond and it will fall off.

The bureaus will only investigate one code twice per year, so if you’ve already said “it’s not mine” they won’t investigate under that again for 12 months.

Derogatory remarks/items can stick around for 7 years plus 180 days past the first date of default. So if it’s a charged off credit card, it will fall off after the first missed payment. I see them fall off earlier though, especially if you challenge around year 6 or try to get some details from the creditor and then they don’t respond.

The statute of limitations varies by state, but it goes back to the John Oliver thing. The older the debts get, it’s more unlikely they are actually owned by whoever is collecting them. They are bought and sold in excel spreadsheets with your name and SSN and no other details.

I often see in fine print “we can’t sue you for this” in fine print on these notices.

In my personal and professional opinion, if they can’t sue you, they can go fly it.

#CreditWithCassie

Credit Strategy + Repair 
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