Will paying a bill in collections help my credit score? Need advice please...
By filmbuff
@filmbuff (2909)
United States
April 24, 2008 6:14pm CST
I've had good credit for a long time. Recently however while checking my credit score at a credit cards website that tells me my score each month, I noticed a 70 point drop and a degratory item.
Wanting to know what's going on, I went to a http://www.annualcreditreport.com/ which is the U.S. government website where you can check your credit report for free once each year.
I found that the culprite is an old medical bill for a measily $106 that just went into collections. To be fair, I don't remember paying this bill and it is my fault although more of an oversight than anything else.
I am planning on getting a new car in a couple months, but with this huge hit on my credit score I'm afraid of the interest rates I will get now.
I would be willing to pay the bill off but from what I've read paying it off will just make the deliquent account "newer" on my credit report and could actually hurt my credit score more than not paying it at all or at least until after I get a car loan in a few months.
Does anyone have any advice on how I should handle this? I'm not sure what I should do...
1 person likes this
5 responses
@Ldyjarhead (10233)
• United States
25 Apr 08
Your best bet is to go to the hospital directly and ask to pay it through them, then ask them to have it pulled back from the collections agency.
I've had one or two things go to collections over the years that were either an oversight or I didn't know about, and both times the original debtor had no problem at all with me paying them direct. It saves them a fee from the collection agency as well.
My credit hasn't suffered at all.
1 person likes this
@Ldyjarhead (10233)
• United States
30 Apr 08
It doesn't matter. The one that you owe the money to originally can usually still take the payment and get the debt back from collections.
They stand to get more of their money that way anyway.
Yep, contact them.
1 person likes this
@callarse1 (4783)
• United States
25 Apr 08
It depends who is reporting it:
Is it the hospital reporting it or have they sold the rights to their account? If they're the ones reporting it they should be able to tell you if they will delete the account once you pay in full or if it will be updated to show it as paid in full.
You should talk to the credit bureaus about knowing how it will effect your score. You should contact directly who is reporting it to find out the details. Generally a paid account is better than unpaid.
Pablo
1 person likes this
@callarse1 (4783)
• United States
29 May 08
Okay so it's probably like NCO that bought it or some other collection agency. Well then you would need to contact them in regards to getting it deleted. It may be, but it isn't always. It depends on the company and there isn't any guarantee. Have a nice day.
Pablo
@filmbuff (2909)
• United States
30 Apr 08
The hospital sold the rights I believe as it is a collection company who is reporting it. What irks me is that they never sent me anything via mail. They just call which I ignore, because I get tons of collection calls for my brother so I've learned to just not answer the phone when they call.
I need to the pay the bill and really it was just an oversight, but man I can't believe how badly it hurt my credit...
1 person likes this
@lovespecialangel (3632)
• United States
25 Apr 08
Paying the bill won't hurt you, but not paying it might. When applying for a loan, creditors don't look just at your score, they also look to see if there is anything not paid for. It's better to pay it off than to leave it unpaid. It will help you in the long run. Trust me, I know.
1 person likes this
@snowy22315 (180476)
• United States
31 May 08
It sounds like ladyjarhead answered your question for you. I think that if this agency is being unfair with you you can also contact the better business bureau. They will also help with mediating between you and the agency in question.
@katsmeow1213 (28716)
• United States
25 Apr 08
I have a LOT of old medical bills in collections right now. I know my credit score is disgusting! Last I looked at my own credit report, it showed good reports for anything that had payments made on it, and bad reports for things that had not had any payments. Right now I am making $25 payments every week to my old bills. It is not much, but it is all I can really afford and it's better than nothing.
It's crazy how much something so silly can mess us up, isn't it? Like medical bills, I begin to wonder why we bother paying so much for insurance.
1 person likes this
@filmbuff (2909)
• United States
30 Apr 08
I know what you mean. I've had my own share of credit issues from when I was younger, but I worked long and hard to get my credit score well over 700. I'm amazed at how much a hundred dollar account destroyed my credit, and am trying to figure out the best way to fix it. It's my fault, but still it's an honest mistake.
