At one time I took a very hard stance of never paying a collection account because no benefit was gained by it. It would not improve your credit nor would it make it worse. You’d just be out of a little cash. As time has passed, I have softened my stance quite a bit with regards to paying past due collection accounts and now I’d say it just depends.
The decision to pay or not pay depends on two key factors:
1. The first factor is: How old is the debt? If the debt is very near the 7-year point of which it is scheduled to fall off your reports organically, then I would say do nothing and just let it fall off. If it’s a new collection and you’ve still got a ways to go, then I would make my decision to pay or not pay based on factor #2.
2. The second factor is: How much do you owe? If you owe smaller cable or electric bills of $100 or so, then I would suggest that you go ahead and pay them. It makes no sense having an unpaid collection showing for such a small amount. If the debt is significantly larger, I’d leave it be and focus on your current bills that are active and in good standing. Creditors put more weight on how you’re paying your bills now, vs how you paid them years ago. Focus on the now.
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