General Credit Topics

[cryoken]

I recently looked at my credit score for the first time. I had a $1,400 charge off that went to a collection agency. I've since paid the collection agency through a credit card, and they have agreed to remove the account. That still leaves me with the original charge off. Does that get removed too? Or does it remain, but with a paid charge off status? Any idea of how much, if any positive effect paying this debt off could have on my credit score? I also have a $400 collection from a traffic ticket that was paid and still shows as unpaid. I'm disputing that one. The only other negative was two late payments back in 2001. My score is 521. Pretty lousy. I'm trying to clean it up to apply for a mortgage.

Any advise or info would be greatly appreciated.

Thanks!

[Boswd]

Once an account goes to collection and/or gets charged off the damage is done.   The CR scoring systems and FICO'S scoring systems don't reward paying off charged off collections.   But the good news is the debt is gone,  if they were reporting monthly than those dings will stop.

As for your first question about the original creditor reporting a charge off, well that depends on whether or not they sold the debt to the CA or just assigned it too them.   If they sold the debt than the deal was made with the CA and not the orignal creditor.    you can try either a good will letter or dispute it with all three CRB's in hopes that don't respond and will automatically get dropped off.

[cinoeye]

When my wife made a deal to pay collections,  it acctualy droped her score 40 points for 3 collections.

She paid them off, and score di not change.

But paing off collections is a good thing, specially when you go and applay for the house loan.

Good luck!

[mattwarner]

For how long do you feel the sting after paying off a previously reported collection?

[Tuscani]

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mattwarner wrote:

For how long do you feel the sting after paying off a previously reported collection?

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IMO, the sting itself and the long term affects will depend on your overall file. Regardless, its no secret that paying collections can hurt your score. Does that mean you shouldn't pay them? Of course not! Paid collections obviously look better than non paid in a manual review. But, PFD is the best option.

[Noah_Bodie]

This is an oft repeated story, and it's the reason I am so adamant on the issue. I hear it over and over again. Experienced it myself. Got a collection, paid it, and saw NO IMPROVEMENT to my FICO score.

Always DV a CA.

Always pursue a PFD, and never pay a collection without a PFD unless you absolutely have to, like lawsuit action under SOL or a prime mortgage lender requiring it.

Opinions vary, and that's mine.

[Nonaii]

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Noah_Bodie wrote:

This is an oft repeated story, and it's the reason I am so adamant on the issue. I hear it over and over again. Experienced it myself. Got a collection, paid it, and saw NO IMPROVEMENT to my FICO score.

Always DV a CA.

Always pursue a PFD, and never pay a collection without a PFD unless you absolutely have to, like lawsuit action under SOL or a prime mortgage lender requiring it.

Opinions vary, and that's mine.

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Your opinion is wisdom.