Does paying off old collection accounts, increase your credit score ?

[Trojan_Large]

Does paying off old collection accounts  increase your credit score ? I need to know this because I am trying to re-fi my home loan and I need to get my credit score up 20 more points. Please advise

[Anonymous]

If you are past SOL then try a PFD.  Any collection, paid or unpaid is equally bad in FICOland.  No points for paying it, lots for getting it.

[Anonymous]

hmmmm. I have a NCO (old Account) that I was considering paying even though they will not budge on removing for payment, however, if it will not effect my FICO either way..then forget it.

[ShanetheMortgageMan]

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Trojan_Large wrote:

Does paying off old collection accounts  increase your credit score ? I need to know this because I am trying to re-fi my home loan and I need to get my credit score up 20 more points. Please advise

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No it won't increase your score, and it's likely to decrease your score.  FICO scoring on deliquent accounts is based on the date of last activity... so when you pay it, basically you have an old unpaid collection turning into a fresh paid collection.

[Tuscani]

Welcome.. Please read the Scoring 101 thread:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=2654

[Trojan_Large]

Good information. I am thinking the best way to go is to try to get this removed from my credit report, even the paid accounts that was in collections are still there in adverse status. So the only option is to get it removed. Thanks 

[Leele]

What is the best way to try to get paid collections removed from your CR? Please advise I have a couple on my TU and on my EQ non on EX....Please help

[fused]

Paying a collection will not hurt or improve your scores. Paying a charge-off (derog trade line) might improve scores because they factor in util calculations while collections reported by CAs do not.