why you should never pay a collection agency

Never paying a collection agency is often advised because paying them can actually harm your credit report by restarting the clock on how long a debt stays on it, which is typically six years from the last payment date. When you pay a collection agency, the date on your credit report updates to reflect the recent payment, extending the time the negative mark stays visible. Additionally, payment may not improve your credit score significantly since the derogatory mark from the missed payments remains. Paying a collection agency can also restart the statute of limitations on the debt, meaning the agency has more time to sue you legally to recover the money. It is best to first verify the debt's legitimacy and understand the statute of limitations before deciding to pay. Debt collectors may also be willing to negotiate a lower settlement amount than originally owed. Ignoring or not paying may lead to continued collection attempts or legal action, but sometimes letting the debt age off your credit report can be more beneficial financially and credit- wise. State laws on statute limitations vary, so the consequences of paying or not paying can differ. Always consider seeking legal advice to understand the best course for your financial situation.