The best way to handle a collections account on credit report is to negotiate for a letter of deletion. But the truth of the matter is this: Sometimes you will be unsuccessful. Here is your third option for dealing with those pesky collection accounts.
Collections Account on Credit Report: Option #3
You could always make payments on the collection item. This is one of my least favorite options. Most of the time, I think you are far better off saving the money and making one payment. However, if you have a problem saving money, and you feel obliged to satisfy your agreement with the creditor, this might be the best option for you. Keep in mind that your score will drop each time you make a payment.
The pros of this option follow:
- Eventually, you will satisfy your agreement with the lender.
- If you are able to negotiate a payment plan, the collector will stop calling you and probably will not sue you, so long as you pay on time.
- You can always call back and try to negotiate for a letter of deletion while you are making payments.
- You might be able to negotiate for cents on the dollar.
- If the debt is more than two years old, you might be able to convince the creditor to stop reporting payments to the credit bureaus so that your credit score can be preserved.
Like I said, making payments on a collections account on credit report is one of my least favorite options. Here are the cons:
- If you are unable to negotiate for a payment plan, you might be sued, and the collectors will definitely keep calling you.
- If you do not negotiate to have the creditor stop reporting to the bureaus, your credit will keep being dinged, and you will not be able to make significant improvements to your credit score until you have paid the debt in full.
If you choose this option, be sure you know how to fix credit! And be sure to read about the other options for dealing with collections account on credit report.