Before You Pay Off Collection Accounts...
If you pay your collection accounts to improve your credit, be sure to negotiate with the collection agency that the account be DELETED from your credit report. If you just pay it, it will still remain on your report for the required 7 years. Have them send a letter stating that if you pay the balance, then the collection account will be DELETED from your report. Just a little info that someone taught me and I used. Score went from 605 to 647 just getting rid of that one account. Hope it helps.
On another board, I learned that sometimes CRAs aren't accpeting the "deletion" letters. They're telling people the accounts are admittedly theirs, so the CRAs don't have to honor the CAs direction to delete.
If you can get the CA to say the account wasn't yours (meaning your simply paying to get rid of a nuisance generated by someone else), you are in better shape.
That's a tough letter to get, but it will bypass the CRAs that take a tough stance.
Then after you pay it off, dispute it. In my experience, if it is paid off and you dispute it, (Like incorrect amount etc), the collection agency will usually not bother to reply or reply with an instruction to remove. Thats what I have done to every collection that has ever been on my report that I actually paid.
You guys are pretty slick. Here's another late night, 4 beer brain storm: If you find yourself in a really, REALLY, bad state if affairs, and you need to make amends with a creditor, AND you have the means to do it, could you put the cash in some sort of an escrow until the credit report was adjusted to your satisfaction? Z
If you're using an attorney, it might carry some weight with the creditor if he told them he had the funds in his trust account for payment to them on completion of their removal tasks.
I had a situation where my attorney held the funds in his escrow account until the lender sent him (among other forms) a letter stating that the bad credit report was erroneous. That way I had that documentation to send to the credit agencies if they didn't correct it.
Hope this helps.
[addsig]
I didn't even need to send the letter to the CRA's. Just the promise from the collection agency was enough for the agency themselves to remove it. I even made a d.p. loan while it was pending. The creditor asked me about it and I showed her the letter. After that, she extended me credit.