Paying the collection agency

I have a couple questions about my credit future and a current debt:

1) I have a debt from Target that I have made one payment on through RJM Acquisitions. I wanted to get the best possible outcome to paying off the debt so I asked if they would remove the "statue of limitations", the mark on my credit report for seven years be deleted. They agreed, and said that since i requested this to be removed, it would say, "piad in full" on my credit report. They said this would happen once I paid them in full. Is there ANYTHING else I should request or ask for from RJM that could benefit my credit score, report, help me pay off this debt?

Also,

2) I have other debts with Cingular Wireless, and TCF Bank. Before I contact the collection agencies to pay them off, any advice?

This message was edited 1 time. Last update was at 01/29/2010

1) I have a debt from Target that I have made one payment on through RJM Acquisitions. I wanted to get the best possible outcome to paying off the debt so I asked if they would remove the "statue of limitations", the mark on my credit report for seven years be deleted. They agreed, and said that since i requested this to be removed, it would say, "piad in full" on my credit report. They said this would happen once I paid them in full. Is there ANYTHING else I should request or ask for from RJM that could benefit my credit score, report, help me pay off this debt?

Toneal, it's great that you are trying to work something out to put these debts behind you, but I think you may be confused about a couple of points. First of all, the statute of limitations has nothing to do with how long a collection account can appear on your credit report. It refers to the time period, under state law, that a collector can successfully sue you to collect. (After the statute of limitations has expired, you could go to court if you were sued by the creditor or collector, raise the statute of limitations as a defense, and their case would be dismissed. The statute of limitations usually ranges from 3-6 years in most states.)

The time period for reporting a collection account is found in the Fair Credit Reporting Act. It is seven years and six months from the date you became delinquent with the original creditor.

You mention two different approaches in your email. One is to ask the collector to remove the collection item if you pay it. That would be advantageous to your credit as it would disappear entirely from your records. Collectors are not required to do that, and in fact, their contracts with the credit reporting agencies prohibit them from removing accounts just because a consumer pays the debt. However, in cases where there is a legitimate dispute over the debt, I strongly encourage consumers to try to negotiate this option.

The second option you mention is asking the collection agency to mark the item paid in full. This is something they must do anyway if you pay. It does not in any way improve your credit rating. The negative item still appears on your credit report, and hurts your credit scores. However, the advantage of resolving the debt is that you don't have to worry about additional interest, fees or collection costs making the debt even larger, and you don't have to worry about being sued for the debt. (If the creditor or collector does successfully sue, a judgment will be listed on your credit file, with a new reporting date, and that will hurt your credit scores even more.)

As I mention, the ideal solution is to ask them to remove it if you pay, but that can be a difficult negotiation. There's no harm in trying, though. If you are not successful in getting those items removed, keep in mind that the older they become, the less they impact your scores. That's especially true if you have current positive credit references listed on your credit reports.

You'll find more information on rebuilding credit here:

http://www.credit.com/learning_center.jsp