Date of oldest collection before applying?

jeduhi · ‎10-31-2011

On 10/17/2011 I had a credit score of 577 TU report high util at that time, since then I have had two older paid collections removed. (It seems like comanies only want to work with you once the SOL has passed) I have the quarterly monitoring only at this point and I don't feel like pulling my scores again to see what type of increase I have seen. I may pull them again once a low util is reported.

Fast forward to 10/31, I'm really looking to do a lot of self improvement in the month of November and December and gear up for the new year. I currently have the funds to pay my credit cards down (I've been using to pay my tuition and paying them off for the rewards, but since I have low limits and only a certain amount of time to pay my tuition before registration I haven't really been concerned with what they are reporting).

I would like to apply for some new credit, but I have a recent collection, that is from an older account but when looking on here it says most recent collection 4 months ago, this is from an account that didn't get paid when moving. It is however not 4 months old it was sold to a new company, and they aren't willing to accept PFD. I did apply for a card while in a store a few weeks ago to get a discount on a decent sized purchased. All it said was "RECENT COLLECTION" and "HIGH UTILIZATION," does anyone have any knowledge with what is considered a recent collection, and if this is an automatic denial for most companies? I'm really eyeing a Citi product, and know I have some work to do, anyone on here had any success with them while rebuilding credit?

RobertEG · ‎10-31-2011

Any collection still appearing in your CR is a major derog, and thus an obstacle to credit approval. In my opinion, the more important item is whether or not the debt itself has been paid. While paying a debt that was under collection does not remove the continued impact of the collection on your credit score, it has the very important benefit of showing a prospective creditor that you have met prior debt obligation.

Failure to have paid a collection is, on the other hand, a fairly strong warning signal to a prospective creditor that you have chosen, in the past, to simply not meet your debt obligations. It is not all just about your three digit FICO score.

jeduhi · ‎11-01-2011

Makes sense I was just under the impression that paid or unpaid a collection is the same unless it is a manual review. I have no problem paying the debt because I owe it regardless of the circumstances causing the collection. Some are willing to accept PFD while some are not.

I'm a Junior in college and would like to establish credit for grad school or beginning my career. I realize I need to take care my debts before being credit worthy, but we all felt the pinch in 2008-2009 that is when any remaining collections are from. I tried to make ends meet but was unable. Since 2009 all my accounts have been paid on time and I've had no collections. However, these companies sell these collections and then it reports on my account as "recent" because the date of the collection is from maybe a few months ago, when actually the default date is over 2 years ago. I PIF every month but never take time to report a zero balance, I use my card and then pay it off in hope of getting CLIs. I'm not a credit risk but if they keep selling these collection accounts to one another I will never be approved because I have a recent collection on my account.

MarineVietVet · ‎11-01-2011

@jeduhi wrote:
Makes sense I was just under the impression that paid or unpaid a collection is the same unless it is a manual review. I have no problem paying the debt because I owe it regardless of the circumstances causing the collection. Some are willing to accept PFD while some are not.

I'm a Junior in college and would like to establish credit for grad school or beginning my career. I realize I need to take care my debts before being credit worthy, but we all felt the pinch in 2008-2009 that is when any remaining collections are from. I tried to make ends meet but was unable. Since 2009 all my accounts have been paid on time and I've had no collections. However, these companies sell these collections and then it reports on my account as "recent" because the date of the collection is from maybe a few months ago, when actually the default date is over 2 years ago. I PIF every month but never take time to report a zero balance, I use my card and then pay it off in hope of getting CLIs. I'm not a credit risk but if they keep selling these collection accounts to one another I will never be approved because I have a recent collection on my account.

You're correct about this. For scoring purposes a collection is the same whether paid or unpaid but a person looking at your report might be more sympathetic when seeing a debt was paid.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

jeduhi · ‎11-01-2011

In your opinion is it better to pay for as little of a settlement as possible when you have sent multiple PFDs and have been refused?

MarineVietVet · ‎11-01-2011

@jeduhi wrote:
In your opinion is it better to pay for as little of a settlement as possible when you have sent multiple PFDs and have been refused?

Sure it's always good strategy to pay as little as possible in a settlement but be aware that any notation of "settled" on your report will be scored the same as a CO (Charge Off).

I think I would continue trying to PFD but that decision is yours. However IMPO (In My Personal Opinion) there sometimes is a point where you finally say "forget it" and just let everything age off. But everyone has to figure out that point in time for themselves.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".