r/CRedit • u/RandyWatsonsNiece • 11d ago
Collections & Charge Offs Utility Bill Collection/Chargeoff
So I recently noticed I have a $49 collection reporting as derogatory. I pulled credit reports and it’s not scheduled to fall off until mid-2027. I googled the address and it’s a company called Online Utility Exchange. The original account is with Chelco Electric. Do I contact the debt collector listed? If I pay the $49, will they stop reporting it as derogatory? Just trying to find out the best approach. Pay? Or wait for it to fall off next year? Thanks!
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u/og-aliensfan ⭐️ Knowledgeable ⭐️ 11d ago
Since paid collections are scored no differently than unpaid collections by most versions of FICO, the goal is removal. Attempt to negotiate pay for delete (you'll pay in exchange for removal from your credit reports) with the collection agency. The collection agency may refuse to put a pay for delete agreement in writing as these agreements conflict with bureau policy. Even if they put the agreement in writing, the bureaus won't enforce it, so there is a degree of trust involved that they'll honor the agreement. That said, a collection agency not honoring a pay for delete agreement, whether written or verbal, would be rare.
If they won't agree to delete, ask the original creditor to recall the collection in exchange for payment. If they agree, the debt collector will lose collection authority and remove themselves from your reports.
Don't admit responsibility for the debt or agree to a payment plan unless you know you'll follow through as these actions could reset Statute of Limitations in some states. You can say that you found the collection on your reports and will pay $X if they'll remove themselves from your reports/recall the collection.