this is what my lender told me...

[Anonymous]

so youre thinking I will lose more points from the collections than I will gain my CC pay offs?

[Anonymous]

I'm saying there is no way to know and anyone whoe tries to tell you what the affects are going to be in detail is full of it.  That many collections, if they all re-aged, could be a huge deal.  A different poster lost 70 points when 2 collections re-aged.  I don't see paying your cards down doing more then 50-60 points.  Maybe a bit more, but it's a total guessing game as to how much the cc payments will help, how many collections re-age, an dwhat overall affect it will have.  Personally, I don't like the odds with that many collections.

[Anonymous]

ok, so if we lose too many points from these collection accoounts reageing. How soon before our score conitues to go up? If all CC are paid off, only one reflects a balance of under 5% (out fo 9 CC total) and we maintain our installment loan for our car.. how much will the scores go up each month?

[Paxx]

I'm going to chime in here because I've spend the last 18 months or so cleaning up both my own and the wife to be credit. We've received our clear to close and are scheduled to close Tuesday (though it will probably be extended due to a roof issue, ugh!)

I think there is some confusion (and please correct me if I am wrong!) about DOLA (date of last activity) and DOFD (date of first delinquency). It is my understanding that the DOLA is not a factor when determining a fico score. Fico uses the DOFD as the start of your 7.5 years until it falls off your report on a collection account and the impact it has on your scores begins with this date.  The closer you're to the first default date the greater the impact. If you default on 2 years prior and decided to make a payment last week the payment will not re-age the account.  Yes, the DOLA will be updated but the DOFD will remaining the same and thus, your scoring should remain stable (not considering other factors such as utilization).  There is no way to re-age a collection account even if it is sold to a collection agency. The DOFD should follow the collection around. Please read the below link for more information.

All that said a paid collection and an unpaid collection is scored the same however, under a manual review a paid collection will obviously look better.

I hope this helps.

http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=8713

If I make a payment to the CA, does that change the FCRA Compliance Date and cause the debt to be reported for another 7 years?

No. Even making payments to the OC doesn't "reset" the reporting period after CO of the account, or even prior to CO unless you bring the account current. Whether you make payments to the CA or not, it's illegal for the CA to change that date and cause the negative information to remain on your credit report for longer than permitted by the FCRA.

Message Edited by Paxx on 09-12-2009 11:18 AM

[ShanetheMortgageMan]

Paxx, DOLA on a collection account is is a big factor when determining FICO score, I've been witness to people paying off old collections and tank their scores hundreds of times.  While it might be illegal to re-age/update the DOLA on a collection account after a payment is made (I'm not really sure if it is or not, but it appears per FCRA that it would be), I can tell you with great conviction that paying off an old collection, and updating it's DOLA, will have a negative impact on FICO scores.

[Paxx]

Thanks Shane,

It's interesting to see what actually happens in the real world with people who deal with this stuff daily vs the documentation found both here and other places. DOFD is what has impact on your score not DOLA from all my reading and research but I guess it doesn't always happen that way.  I would honestly take this question to the rebuilding your credit forum. The people who browse and monitor that forum have heaps of information that is applicable to this question.  That forums has been a tremendous resource for me.

Good luck!

Message Edited by Paxx on 09-12-2009 11:27 AM

[Anonymous]

All collections are judged the same paid or not, it is the DOLA that determines how much weight it is given.

It is perfecly legal and accurate for a company to update DOLA when you pay an item as there was activity an the account.  It is FICO's scoring method that screws this up, not the companies.

Having the DOLA change does not affect the SOL or the length the item stays on your report, just the amount of weight they give that account.

[Paxx]

SOL can be reset by the DOLA.

I actually very curious about this question for not only self help reasons but also to help the OP. I created a thread in the rebuilding credit forums.  Hopefully it will spark a discussion and get some clarification.

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&thread.id=83014

Message Edited by Paxx on 09-12-2009 11:45 AM

[Anonymous]

I apologize, in some states it can affect SOL.

Also, the new FICO 08 is suppossed to address this entire issue.

[Anonymous]

so what exactly are saying? the collections are going to plummit my score.. and paying the cc will have little effect for me? why'd I bother is really what im starting to ask myself. I did my homework.. I met with 3 lenders.. who all said the same.. we needed to settle with old collections.. so I did, and now what? even paying my old collections isnt much of a difference?