• Last Updated:
  • Apr 24th, 2019 3:31 pm
Tags:
[OP]
Deal Addict
User avatar
Apr 9, 2007
1076 posts
38 upvotes

Rebuilding credit

A few years ago, I had honestly forgotten to pay off an old Credit Card with a balance of about $200. I swore I had this paid off, but I couldn't find proof of payment from my bank statements from this.. It was because I had two credit cards with the same bank and I was certain that they were both paid off.

A few months later in July 2016, they sold off the credit to collections, and my credit score was shot (currently sitting at about 650 and not moving, despite what i do..)

I've read a few options that I have, but was wondering what would be the best course from here.. I have no issues paying it off, even though it was my dumb mistake. I'm not in a rush to repair my credit, but it would be good to have in case.

1. Wait it out until it drops off credit reports in 2022/2023 - With almost three years passing, it may be ideal to wait it out without triggering a new credit event if I were to pay it off.

2. Negotiate with collections - I've read that this is good for large amounts of money owed, but the larger the amount written off by collections, the more negatively it will impact your credit in the short term. Not sure how bad of a credit hit I will take if I negotiate 50% off or more what is owed.

3. Pay off in full - This seems that it would be the fastest recourse to rebuilding credit.

lastly, since i had two credit cards with the bank, they put both of my accounts in a derogatory state where only one had an outstanding balance.. is this correct or should I ask equifax/transunion to remove these?

Thanks.
5 replies
Sr. Member
May 16, 2017
563 posts
577 upvotes
I'm assuming the 2nd card was cancelled by the issuing bank and not on your request. If so, they would have cancelled it for negative credit reasons related to your lack of payment on the other card, which would be a "derogatory" reason for closing the account. The typical credit card agreement effectively allows them to treat all your accounts as "one" when it comes to outstanding payments.
Banned
Apr 11, 2019
30 posts
23 upvotes
Then "1." is your answer. Anything else will lengthen the time frame for derogatory to drop off.
Don't play scared
Sr. Member
Apr 13, 2005
525 posts
285 upvotes
Markham, ON
Contact the credit agency and see if they're willing to remove the item off your credit report.

In Canada, they don't have pay for delete as they do in the US, but there have been examples of "good hearted" collection agents who have gone above and beyond to have items removed off the report after payment.

Don't wait 3-4 years for a $200 collection item (probably doubled by now with the "fess").

Do you not plan to apply for any credit product in the 3-4 years? For something like a mortgage or car loan, I'm sure you can explain your dumb mistake during the manual review when the account is paid off. If it's outstanding, there's no explaining.
Banned
Apr 11, 2019
30 posts
23 upvotes
The clock will reset (6yrs) if OP pays. And he did say he's in no hurry to do anything about it.
BTW, a 650 fico is not horrendous, and OP should be able to explain away the 200 if and when he chooses to apply for something.
Don't play scared
[OP]
Deal Addict
User avatar
Apr 9, 2007
1076 posts
38 upvotes
to be fair, i already have a mortgage, it was just bugging me because I get denied for any new products i'm applying for (churning cc's)

i think the best option is to just wait it out for another 3 years.. paying it off and waiting another 6 years to fall off completely seems backwards.

Top