Back in 2009 I owed roughly $800 on a credit card and had a dispute with the bank it was issued through. Through a mistake they made, it ended up costing me about the same amount so I refused to pay it. After a while the debt was sold to collections, anyone that called I promptly told to go f themselves.
Now that I have turned the page and become more fiscally responsible and care about my credit score I have some questions for the MMM community. My credit score is currently just under 700.
Do I:
A: Get a hold of the collections company and pay it in full today
B: Get a hold of the credit bureaus and dispute the debt
C: Do nothing, I don't need a good credit score till I purchase a house...which will be more than 7 years after it showed up on my report anyways so it is my understanding it will disappear from the report completely by then.
I'd start with B - always dispute erroneous charges. However, since it is 4+ years old it may be very difficult to change at this stage. Which leads you to "A" - but here i'd bargain too - call up whomever now 'owns' that debt and see what they would accept to close it out. They buy your debt from the cc company for a fraction of what it's worth, so you might be able to settle it for less than what they say you owe.
unfortunately, credit scores wind up being more important nowadays than simply when you take out a loan. Employers are using credit scores (justly or not), and landlords and rental companies now do credit checks to see if you are a risk.
Also, as I understand it, as long as the debt is still on your record it continues to hurt your score. It's only after it's
paid off that it will gradually go away (typically after 7 years).