Do NOT Pay Collections Companies
The first thing we all hear when learning how to repair our credit is to pay off old debts so they will be removed from our report. That is partially true. You do want to pay off the credit cards. Pay off anything that is still open. However, DO NOT pay the collections companies. It can actually harm your credit in the long run and make you use money that could be spent elsewhere….for example towards rent or food. I know this advice is contrary to just about everything people will tell you (especially the collections companies). But I’m actually going to tell you why. When the credit card companies turn over your outstanding balance as a charge-off, what this means is that they’ve cut their losses and sold your account for pennies on the dollar. Then, they’ve reported this on their year-end busines...