Is it better to pay original creditors rather than debt collectors?
Chuck N asked:
I am waist deep in a bunch of small debts that total around $5,000 not counting $33,000 in student loans. Most of the debts have moved on to debt collection from other company’s but i have tried and been able to make payments to the original creditors. I am just wondering if paying the original creditors rather than the debt collectors would better reflect on my credit.
I am waist deep in a bunch of small debts that total around $5,000 not counting $33,000 in student loans. Most of the debts have moved on to debt collection from other company’s but i have tried and been able to make payments to the original creditors. I am just wondering if paying the original creditors rather than the debt collectors would better reflect on my credit.
Tags: Creditors, Debt Collection, Student Loans
June 19th, 2011 at 1:25 am
You have no choice. You must pay the party that now owns the debt. If the debt has been sold to the collection agency, that’s who you now owe. In that case, your credit record should reflect a charge-off by the original lender.
June 26th, 2011 at 5:57 pm
If the debt collectors are knocking on your door, it’s too late to pay the original creditors.
June 26th, 2011 at 11:01 pm
Paying off derogatory items will not improve your score. The damage is done and will remain for the balance of the 7 year reporting period, whether paid, settled, or unpaid.
If the debt is with a collection agency, that is who you have to deal with. They probably bought the debt from the original creditor. You can probably settle for less than the full balance. The older the debt, the smaller the settlement. Lump sum gets the best deals. Get any settlement agreement in writing and do not give the collector direct access to your bank account.