Im trying to figure out the best way to deal with a private student loan that got charged off. I've been slowly repaying the debt collection agency, planning to repay it in full, but now wondering if that's actually the best strategy as far as my credit score is concerned. When I graduated and consolidated my student loans, I forgot about a small private loan I'd taken years earlier. It came due, earlier than the rest of my loans, but as all the stuff was getting sent to my parents house/ calls were going to their landline, it slipped through the cracks and got sold to collections before I realized what was going on. (They thought it was junk mail/telemarketing calls and didn't ask me about it for a while.)
I did some googling at the time and for whatever reason concluded that the best approach was to pay it in full (rather than negotiating to pay less) so it would be on my credit report as paid in full, rather than settled. (Payment to the third party, that is. As I was unable to pay the amount in full to the original creditor at the time, they told me there was nothing they could do and it was out of their hands.) So I've been paying the debt collectors in small increments for about a year now and gotten it down from about 3500 to 2500.
Now some further googling led me to discussions on credit karma forums. Some of the stuff I've read has led me to believe that:
- paying off a debt collector won't change the status on my credit report from the original lender (it's currently on my report as CO, charged off.) though once it's paid I may be able to request that they remove/update it?
- i may be better off just not paying it at all and in fact may be able to get rid of it entirely by disputing it, saying I have no contract with them (?) I don't really know what this means and it doesn't make a ton of sense to me.
Are there other options I should consider? I'm not trying to get out of paying it, and if I keep chipping away I'll be able to eventually. But if doing it that way isn't going to help my credit, and potentially make it worse, then maybe I shouldn't keep throwing money down that hole. I'm employed, thank god, but also currently paying off lots of other debts that are still in good standing. I also haven't been paying it too fast because, no interest, unlike the rest of the debts I'm paying off and are therefore prioritizing. But I don't want to kill my credit by dragging ass on the one in collections.
What would you do?
I did some googling at the time and for whatever reason concluded that the best approach was to pay it in full (rather than negotiating to pay less) so it would be on my credit report as paid in full, rather than settled. (Payment to the third party, that is. As I was unable to pay the amount in full to the original creditor at the time, they told me there was nothing they could do and it was out of their hands.) So I've been paying the debt collectors in small increments for about a year now and gotten it down from about 3500 to 2500.
Now some further googling led me to discussions on credit karma forums. Some of the stuff I've read has led me to believe that:
- paying off a debt collector won't change the status on my credit report from the original lender (it's currently on my report as CO, charged off.) though once it's paid I may be able to request that they remove/update it?
- i may be better off just not paying it at all and in fact may be able to get rid of it entirely by disputing it, saying I have no contract with them (?) I don't really know what this means and it doesn't make a ton of sense to me.
Are there other options I should consider? I'm not trying to get out of paying it, and if I keep chipping away I'll be able to eventually. But if doing it that way isn't going to help my credit, and potentially make it worse, then maybe I shouldn't keep throwing money down that hole. I'm employed, thank god, but also currently paying off lots of other debts that are still in good standing. I also haven't been paying it too fast because, no interest, unlike the rest of the debts I'm paying off and are therefore prioritizing. But I don't want to kill my credit by dragging ass on the one in collections.
What would you do?