5 "Open" Collections

[Anonymous]

Hello everyone,

I have a question for many of you who have paid open collections off. I have 5 "open" collections which all total for about $1050 combined. I can easily pay all of this off within the next two months. But my question is......when I do pay these accounts off......how much will my score increase? Will it be a drastic increase? How does myFico work in terms of paying off your collections? Or does it always affect your score paid or non-paid?

I would really appreciate some information.

[Anonymous]

Welcome to the forums, Metaphizix.

To answer your question, it doesn't seem to matter scoring-wise whether or not to have paid collections, unless it's for credit card grantors. The decrease in balance owed if you have open revolving accounts can affect your credit utilization and raise your score marginally. But in practice, every debt paid is a harassing creditor out of mind.

[Anonymous]

Yes none of the debts I owe are for credit card companies. 2 Parking tickets, verizon bill that I got screwed on due to letting someone use my name for cable and internet, and a unpaid golds gym debt.

[Anonymous]

Then, if you do pay those off, the score increases will come from those disappearing from your credit report by negotiate a pay-for-deletion or making a goodwill request of the collection agency to remove them. If they are older debts and approaching the seven-year fall-off point, when they go (and if you did pay them) they'll be gone and you'll likely experience a scoring bump then.

[Anonymous]

Are they updating each month?  If so you will see your score slowly climb the more time passes since the last update.  As stated before, FICO does not differentiate between paid and unpaid collections.  Paying a collection is a peace of mind knowing that the CA cant continue to take collection actions (suing you for the balance if within SOL).