Debt Management Q&A
Q: I have several accounts that have been sent to collection agencies. They are offering to settle my debt for less than what I owe. Will paying off collections accounts for less than I owe affect my credit, or should I pay the debt in full?
A: I have a question for you: does your financial situation allow you to pay your debts in full? If you decide to pay your debts in full, your accounts will be marked as "PAID." If you accept their settlement offers, they will be noted as paid for less than the total amount due on your credit report. While paying off collections accounts is unlikely to significantly impact your credit score, it is still a smart thing to do.
Paying these debts will lower the total debt you owe-and more often than not, this will look better to lenders than leaving them unpaid.
So, if you're able to pay the accounts in full, go for it! However, if you just can't swing it, paying off collections accounts can be better than leaving the account unpaid.
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