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Is paying off Collection worth UTIL%?

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recoverysauce
Valued Member

Is paying off Collection worth UTIL%?

Hi,

I am long time lurker and first year rebuilder.

 

I paid off a lot of baddies. about a year ago and been rebuilding my credit since, however jus recently I got hit with a bill in collections I know I owe for $450. It was a old Utility bill. Now my question is right now my utilization is around 55% working on getting that down below 30%.

 

Do I go ahead and pay the bill so it shows 0 balance and take temporary hit on Util? Just don't see this bill going away anytime soon it is from about 3.5 years ago.

 

I have noticed a dip in my points by about 25-35 points across each when this hit.

 

They will not PFD, the 1st lady said they would and the 2nd said they do not do that we are a CA.

 

Thanks for any help.

 

edit updated: Is it worth paying off my collection for a temporary increase in my credit card utilization over the next month by about 25% increase?

Message 1 of 5
4 REPLIES 4
RobertEG
Legendary Contributor

Re: Is paying off Collection worth UTIL%?

Collections are not included in your % util calculation.

 

Additionally, % util applies only to revolving credit.

Utility bills/debts are not revolving credit.

They are "other" type credit, due in full when billed.

Message 2 of 5
recoverysauce
Valued Member

Re: Is paying off Collection worth UTIL%?

Sorry I did not ask the question in first post. edited first post

 

My question. Is it worth paying off my collection for a temporary increase in my credit card utilization over the next month by about 25% increase?

 

 

Message 3 of 5
gdale6
Moderator Emeritus

Re: Is paying off Collection worth UTIL%?


@recoverysauce wrote:

Sorry I did not ask the question in first post. edited first post

 

My question. Is it worth paying off my collection for a temporary increase in my credit card utilization over the next month by about 25% increase?

 

 


As stated a collection account isnt factored into revolving credit utilization only OCs are. If the collection is updating monthly you want to settle it so your Fico can begin to recover.

Message 4 of 5
3elizabeth
New Contributor

Re: Is paying off Collection worth UTIL%?

I agree with gdale6, paying it off so that it does not keep updating is a good plan.  However, please do some more reading on these threads and try for a PFD with the OC in writing and keep trying.  Maybe they can take it back from the CA.  The bottom line is that they want their money too.  The temporary hit on your utility will be resolved as you pay things down, but the collection will be a roadblock for a long time, and as you say, you know you owe it, so the right thing to do is to pay it.  Hopefully you can work out a PFD.  Good luck!

In the 600's, moving toward 700's and 10K in credit. My motto: At the end of my life I want to be able to say "I wish I hadn't," not "I wish I had."
Message 5 of 5
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