Score goes down realize when you pay off a collection debt.

[kyoung3633]

I just recently paid off a collection account and my score dropped a couple points. Can some one explain to me why even paying off the debt is counting against me. Don't understand that one, I realize the debt stays on credit for the duration of 7yrs, I am OK with that but paying it off counting against me is crazy.

[FrugalRican]

I think there's a piece of information missing here.

Did you pay it off and it got deleted... or did you only pay it off completely and it is still there?

[Walt_K]

Paying collections is not supposed to affect scoring.  A collection is scored the same whether it is paid or unpaid.  There are reports of people paying collections and the CA and/or CRA screwing  up how it is coded and reaging the collection causing the score to drop, but that usually results in a large drop.  If you saw a few point change, it's probably not related to your collection. 

[kyoung3633]

It was related to the account, i belong to score alert so any time a change is made it shows the account and why, the only thing i saw was the account in question and the dollar amount showing zero

[kyoung3633]

No it did not get deleted, when i received the credit score alert letting me know a change was made i checked and it showed the account and the zero balance.

[FrugalRican]

Then it wasn't the "pay-off" that knocked your score.

[Walt_K]

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@kyoung3633 wrote:

It was related to the account, i belong to score alert so any time a change is made it shows the account and why, the only thing i saw was the account in question and the dollar amount showing zero

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ScoreWatch doesn't always get the reason correct.  There are several threads discussing this.

How many points did you lose?  Are you sure there were no other changes? 

[MamboItaliano]

It is and always has been my understanding that if you pay off a collection, it changes the DOLA. When the DOLA  is updated on a negative, it makes it a more severe hit against your score. This doesn't change your falloff date, but does hurt your current credit more.

At least, that was my understanding. Are you guys suggesting I am wrong? 

[MarineVietVet]

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@MamboItaliano wrote:

It is and always has been my understanding that if you pay off a collection, it changes the DOLA. When the DOLA  is updated on a negative, it makes it a more severe hit against your score. This doesn't change your falloff date, but does hurt your current credit more.

At least, that was my understanding. Are you guys suggesting I am wrong? 

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Collections are scored off the date of assignment and nothing else. But the CA's and CRA's have to do all the coding correctly and that's where it goes wrong sometimes .

Again I'll say a change on DoLA is not supposed to have an effect.

[Anonymous]

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@MamboItaliano wrote:

It is and always has been my understanding that if you pay off a collection, it changes the DOLA. When the DOLA  is updated on a negative, it makes it a more severe hit against your score. This doesn't change your falloff date, but does hurt your current credit more.

At least, that was my understanding. Are you guys suggesting I am wrong? 

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Actually, I think you are right on the money.  I am helping a friend with her credit and, this has been exactly what's happened in her case. Every time that DOLA changes it makes a difference, to the negative.  Maybe, as Marine said, its not supposed to but, with my friend's FICO®, it definitely has made a difference.