Denied Secured Credit Card

When you check your report it does not count against you...It only counts against you if you're constantly applying for credit.

Thats what happened, that account is over ten years old and you paid it. It was out of the statute of limitation,and your were no longer legally required to pay it. It should have already been off your credit report, but by sending them the payment you re started the Statue of Limitations and it will be on your credit report for another 7 years.

Did they say it would be considered paid in full or REPORTED as paid in full. It sounds like splitting hairs,but it makes a big difference. Most likely it will be reported as either a paid charge off or paid collection. Either way it does more damage then if you had ignored it (as it was time barred and Midland had no legal recourse to collect).

Midland Credit buys junk debt for pennies on the dollar and tries to collect,hoping you will cave and pay face value. IF they can get face value, they may see a return on investment of 500 to 1000%. It is very important to know what accounts you have had, when you closed them, when your last payments to them were, and what if any remaining balances they had (hopefully any closed accounts were closed with zero balances).

Ok, my check hasn't gone through to Midland yet - should I cancel it??? I never closed the account through Associates, I just never paid on the account and Midland took over and have been sending me these settlement offers. I thought I would have to pay it - but if I don't pay it (or if I cancel that check ASAP) it looks better on my report?? I know it's been over seven years since any payment or movement has been made on that Associates account. Should I cancel that check (for $1200!!), or is it way too late and I've just screwed myself? This stuff is confusing and tricky - darnit!

Its too late. the SOL is restarted by them receiving the payment. In some state just talking about it can restart the SOL clock. IF the account is out of SOL , then it should not even be on your report in the first place, and therefor not affecting your score. But since you have restarted the clock.

I hate to say it but in your own words you have kinda screwed yourself. At this point all you can hope for is that they either won't report the account paid at all. Or if they do, the report it as simply an account that was paid. If they report it as a paid collection or a paid charge off then your score will take a hit for the next 7 years.

on a final note, it is important to remember that even though a debt has passed the SOL, doesn't mean they cant try to collect, they can, TRY, but they have no legal recourse, and they can no longer report it(which is why many agencies will try to re-age the accounts which is an illegal practice).

Afterthought....You should Call Midland and tell them you need a letter stating the account has been paid off (this will protect you from someone else getting the account and trying to collect on it later long after you have forgotten about it). Also ask them if it is possible that they don't report it. Pull your credit reports and see if the account is on there. If it is on your report dispute the account as being out of SOL, and therefore not reportable as being time barred. The CRA will do an investigation. During that investigation it should come up that the account was paid and update. I don't know if it will work, but its worth a shot.

Under Federal law your entitled to a free copy of your credit report from any CRA once a year. the FTC has set up a website with more information, an also a link yo request your Major credit bureau reports on line. it is http://www.ftc.gov/bcp/conline/edcams/freereports/index.html
The FTC's FCRA web page for the Fair Credit Reporting Act is http://www.ftc.gov/os/statutes/fcrajump.htm

indebt,

Have you set up any payment plan? Or this is the only payment that you had to send them? Ask them to take the item off of your report since it is past 7 year reporting time. Make sure it does not stay there as paid charged-off for more 7 years.

Ok, so I just got off the phone with Midland and I asked about my account being inactive for so long and why they can still collect. She told me the account is still able to be collected through April 2007, so I guess I just missed the cut-off date. She also told me that since I am paying it off, it will be reported as "paid in full" and will actually look better on my report than not paying it at all. Of course, she's probably supposed to tell me this stuff. I requested a letter stating the payment was made (it was a one-time payment for $1200 - it was a settlement offer to pay only half my balance)and she told me they always send a letter within 30 days of the payment received saying the debt has been paid. I'm still uneasy about this, but she assured me they absolutely can still collect on the account and that it is a good thing I paid it off. Who do I believe?? Do you think I still screwed myself??!!! I'm dying to know how this will really affect my report!

Well paying it in one payment won't restart the clock I don't think...So that's a benefit.

Paying your debts is always good. Even a paid charged-off is better than unpaid charged-off. And if they update it as paid in full, it will be an added advantage. But you have to make a written agreement stating the whole story.

A written agreement to who? The credit bureau?

Written agreement with the collection agency or the creditor who you are going to pay. It should state clearly that on receipt of $___ amount they will report your account # as paid in full. Hope that makes sense.

Yes, it does! So in this case I should contact Midland or Associates (the original creditor)? Payment has already been made and the account is considered paid and they are sending me a confirmation letter w/i 30 days. Should I still write to them? Thanks for answering all of my q's!!

I think you have done it. Wait for the 30-day time frame as mentioned by them. Let's hope for the best and keep us posted on what is going on.

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