Credit score jump from paying off debt collector?

[bd1980]

Hi, been trying to search everywhere but can't seem to find an answer, hope you guys can help, seems like a great forum here. I just ran my CR and found out I have an old Verizon bill that got turned into a collection agency from my divorce few years ago that I didn't know about. I ran my score and its a 588 (I also have some late payments in my past). This is the last bill I have then I'm debt free other than student loan which is being made timely. What can I expect my score to go to after this is paid? (I want to pay it in full, not settle). Also, my score says that because I have no credit cards, thats also hurting me. I don't like the idea of cards, but I guess if that's what I need to do, then that's it right? I want to buy a house soon which is why I'm on this mad hunt to improve my score. Much thanks in advance!

[Duncanrr]

I just paid mine and today I had my score watch alert. My report now reflects it's paid off but score didn't go up at all. Report indicated the previous amount was $109.

[JonRun]

You need to get them to agree to a Pay for Delete if you're going to pay it. Just paying it won't do a thing for your score. I had a recent PFD success on a collection that was about 5 months old and my FICO score jumped almost 40 points. I added an Orchard Bank credit card and it went up another 14 points.

[pizzadude]

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@JonRun wrote:
You need to get them to agree to a Pay for Delete if you're going to pay it. Just paying it won't do a thing for your score. I had a recent PFD success on a collection that was about 5 months old and my FICO score jumped almost 40 points. I added an Orchard Bank credit card and it went up another 14 points.

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+1.   You need to get the collection deleted in order to help your FICO score.   

Also if you do not have any credit cards/revolving accounts open then you should definitely open 2 or maybe 3.   You don't have to use them at all, but FICO scoring puts a lot of weight on revolving utilization.   

[pixiefairy]

I just paid an old verizon account and they settled for less and deleted it off my CR my account was 6 years old  my score did not jump up that much

[Hopelives2]

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@pixiefairy wrote:

I just paid an old verizon account and they settled for less and deleted it off my CR my account was 6 years old  my score did not jump up that much

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The more time lapses, and the closer a collection account gets to falling off, the less it impacts your score.  So, in your case, the item was about to fall off so paying it helped clear the bill, but not your score as much as you had hoped.

In the OP's case, the collection account is only 5 months hold and basically hammering his score.  In the OP's case, he should PFD because of the newness of the collection.

[pizzadude]

The FICO impact of removing one collection will vary based on what other derogatory information is on your reports.    For example if you still have other collecitons showing then removing one won't make as big of an impact.

[bd1980]

Thank you so much for all of the responses. When I ask them for a PFD, is this something they are gonna want me to pay extra for or just something they will do in good faith? Also, what might be my best routes at getting a CC so that companies are not running my credit and me getting declined? Thanks again! Sorry for all the questions, I'm a total newb to this stuff, especially the acronyms lol.

[pizzadude]

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@bd1980 wrote:
Thank you so much for all of the responses. When I ask them for a PFD, is this something they are gonna want me to pay extra for or just something they will do in good faith? Also, what might be my best routes at getting a CC so that companies are not running my credit and me getting declined? Thanks again! Sorry for all the questions, I'm a total newb to this stuff, especially the acronyms lol.

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I wouldn't expect them to ask for extra money for a PFD, but just make them a settlement offer, contingent on deleting the collection, based on what you can afford to pay.

In terms of getting a CC, have you ever had revolving credit before ?   You could consider starting with a secured card, or one of the rebuilders like Cap1.....

[JohnPTEX]

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@pizzadude wrote:

In terms of getting a CC, have you ever had revolving credit before ?   You could consider starting with a secured card, or one of the rebuilders like Cap1.....

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+1 - Cap One is good because you can do a "soft" inquiry pre-approval and its a semi-major card - STAY AWAY from First Premier and the others similar to it