Credit repair with accounts in collections

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Devan ER

• October 01, 2020 18:01

My EX husband and I got my credit into trouble about 4 years ago.  I now have about 4 accounts in collections and a bunch of charge offs, all with about 3 years until they fall off my credit report.  I have come into a lump sum of money recently and planned to pay them all off.  Upon investigation, that might not be my best option.  My concern is why pay them off if they will not make my credit better (or come off my report).  Also, will it start the clock all over again?  I am no longer worried about any of the companies suing me due to the statute of limitations being 3 years in SC, although, now I live in AL? I'm afraid to even contact these companies due to them being off my credit soon enough.... I've also though about talking to a professional, but, I'm not sure what kind of company to use?  Any advice is appreciated!

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  Kim

  • October 01, 2020 19:24

  Hi Devan,

  This is a tricky situation!  Here's a great resource from our NerdWallet content that explains a little more thoroughly how paying a collections account may affect your credit: 

  Does Paying a Collections Account Help Your Credit?

  Additionally, this resource can help you find a professional to talk to about your situation: 

  Best Financial Advisors of October 2020

  Good luck! Please let us know if you have any additional questions and we'll do our best to help.

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  CHRISTOPHER BATTISTA

  • October 09, 2020 16:39

  Paying the debt in full will not "reset" anything. a "partial" payment might. They will still fall off at the same time.  In the mean time, a PAID collection scores better (or at lease looks better) than a DEFAULT collection, so it should mildly increase your score or your approval odds.
  
  "Doing the right thing" aside... ask yourself what the next 3 years holds for you. Will you refinance a house? buy a car? take a loan? put a kid thru school?  If you know you can sit pretty for the next 3 without needing that extra few points, I can say I would rather be liquid for cash than credit in this economic climate.

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  Devan ER

  • October 09, 2020 19:49

  Thank you, that REALLY helps! I shouldn't need the credit for anything. Additionally, I managed to get a car loan and I'm paying that off and joined Self for some good points.

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