Paying off collections

[Anonymous]

Is it true that if you pay off an old collection, even if it is 5 years or older, that your score can drop signficantly as it is viewed as a new collection or recent collection?

[Anonymous]

According to my stepmother who is a lender, yes.  I haven't seen a drop in my score from paying things off, its actually gone up about 40 points in the last 3 months, but I also have a credit card 6 months old that I've been paying great.  My husband's score on the other hand has dropped by about 20-30 points in the last few months, although his report doesn't yet reflect any of the payments we've made against collections. 

Jennifer

[dangphuocloc72]

EQ SAY :

Pay off collections, judgments, or tax liens.
Unpaid collections, unsatisfied judgments, and unreleased tax liens are all evidence that you have not paid your debts in the past. Paying off the debts that resulted in a collection, judgment, or tax lien won't remove it from your credit report, but it will reduce the damage it causes to your score. But be aware that paying off a collection, judgment, or tax lien will make it recently active, which could cause your score to drop in the short term.

[Boswd]

Yes if you pay something off try to balance the temporary drop by reducing your utilization of your credit cards or something along those lines.   In the long run if you can't get a PFD, a paid collection is always better than an unpaid, I don't care what anyone says.   An unpaid will alway show up under a manual review of your credit report.

[dangphuocloc72]

after you paid try to dispute not mine , or i am not late , any reason you want . .

[Anonymous]

paid collections can hurt scores as the date paid makes it newer. It is always better to send PFD letters before paying.

[Anonymous]

In a nutshell - yup.

Also, if you live in a state that allows CAs to re-date accounts after recent activity (most states allow this), your entry gets re-aged and it stays on your report longer. 

That's why you want to negotiate a PFD if you want to pay the collection.

[dangphuocloc72]

I don't know , but on my 2 collection ( Sprint and ATT ) after I paid them in full my score went up good ( 02/07 EX 522 , 04/07 I went to dealer jusk Joking May I buy the car with score 522 , they say let us check . then he came back yeah , we have a car for you  ) He told me your score 610 . now after I dispute not mine . ( 2 of them ) from CRA , they not verify after they got there money every thing remove out of my CR . now EX 675  ( one late from child support 180 day , one charge off Verizon ) just send GW letter , hope they'll help me . .

TRENDING ANALYSIS Your credit score over time

Message Edited by dangphuocloc72 on 09-20-2007 01:09 PM

Message Edited by dangphuocloc72 on 09-20-2007 01:09 PM

[Boswd]

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JennLewis wrote:

In a nutshell - yup.

Also, if you live in a state that allows CAs to re-date accounts after recent activity (most states allow this), your entry gets re-aged and it stays on your report longer. 

That's why you want to negotiate a PFD if you want to pay the collection.

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I've seen you float that information out more than once.  I'm a bit curious of where you got that from.   The length of time any negative info stays on your credit report is 7.5 years from the DOLD with the OC that lead to the charge off/collections.   Once that time has passed the collection account falls off with the OC account from your report.   State's have no juridiction over that policy it's part of the FDRA.    

[Anonymous]

Jenn, CRTP only re-ages when paying derog from public records(liens etc)

SOL can change but does not have affect on CRTP