09-07-2010 02:33 PM
I have paid off several creditors and after the first Change that's it. Nothing, no more changes period. They say it helps if you pay but it your score does not change then No it does not help......Can anyone honestly tell me what's the amount of actual credit ( your actual score ) that is going to change by paying off a Bill in full or a partial payment? 1 point 5 points? If nothing is going to change for 7 years I would be smarter to keep the money and just wait..
09-07-2010 02:49 PM
As the actual algorithm that determines your score is not public, no particular prediction can be given regarding any one change in your account. However, a lot of confusion arises because people are given faulty or misleading information regarding their credit score. For example, paying off collection accounts does not improve your score. The damage is already done to your score by having the collection account. This is equally true about late payments, although there is a small score increase for bringing a delinquent account current. But by and large, your score only improves if you get the negative information/account deleted, which is why you see things such as goodwill letters and PFDs advocated so strongly in these forums. The Credit Scoring 101 thread is a good place to learn about what factors into your score and what helps and hurts it.
09-07-2010 05:57 PM
Ditto what JoeBJay said. There are just too many factors that go into your score. Experian has a score estimator that takes all the items on your credit report and allows you to make changes to them hypothetically and see a "possible" outcome from changes made. Its not very detailed as far as deleting vs. paying off a collection account but can give you "general" idea of what your score has the potential to be with the current items on your report.
Also as JoeB said, there is a "decent" score change when a collection is deleted vs. "paid in full" and still on your report. Every claims that there is a specific number of a certain kind of accounts to have but this is VERY different for almost every lender. For instance Creditor A might look to see that you meet their "credit profile" which say might include having 3 CC 1 installment loan and a reasonably acceptable debt to credit ratio of say 25% while Creditor B might want more CC and no "open" installment loans with a lower debt to credit ratio say 10%.
Rule of thumb though is to make sure and keep your balances low. How low is up to you because I am not a credit expert and do not know that actual algorithm for figuring a credit score.
One more thing that will surely impact your score is the length of credit history. I myself saw one of my very old collections get deleted and my score actually dropped 9 points just from this one deletion. The reason.... I have no friggin clue other than it is possible that MY particular credit profile was using that very old collection account as payment history. Now all I have is newer (still old) but newer than the one that was deleted credit history that has a shorter time frame.
Also if you were to take two identical people and they have identical and I mean identical credit reports it is still possible for their scores to be a little or even a lot different. so don't get discourage if your credit score doesn't jump 100-150 points as you see advertised on many websites. This is just simply not true as everyone's credit file is different.
Hope this helps a little. If you have more questions that you don't think can be answered on this forum start scouring government websites like the FTC's website or even your states Fair debt practices information and see what you can dig up. Just remember that if someone guarantees that their method will work even for you they are most like just telling you this to get you to buy something. Everything you need is at your fingertips for free you just have to do a little digging.