Paying an account in Collections

[Anonymous]

Hello everyone. I will be applying for a mortgage this summer so I am in the process of cleaning up my credit. I have 2 accounts that went into collections a little under a year ago. I want to pay them off but I was told that it could lower my credit score. Can someone share some insight on that?

[2b2rich]

I don't think it will tank your score very much.  The debts are still very young and are probably still having an impact on your score for that reason.  Paying them off would cause the CA to update the collection and you *might* see a small ding from that.

You don't say how much the collections total.  If they are very large, the drop in the amount of debt you owe, may actually off set the update.  I had this happen, but it was a HUGE decrease in debt owed so I actually got a score jump just a little. 

[Anonymous]

Sorry, The amounts are not that large at all. One is for $138 and the other is for $278

[Anonymous]

You definitely want to get those collections taken care of. They may hinder you in getting a mortgage. Try to get a "pay for delete" (aka PFD on the forums), this is where you get them to agree to remove the collections from your reports in exchange for your payment. Study about "pay for delete" agreements before you proceed any further.

[gdale6]

If these are updating on a monthly basis now paying them is not going to drop your score its already been hit. If it hasnt updated in awhile and you dont get the PFD when it updates to paid it will drop your Fico, You want to try the PFD first before just paying and if they are not updating then do nothing until after your mortgage pulls.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Q-amp-A-Examples-and-PFD-Success-Stories/...

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/td-p/4519

[Anonymous]

Thanks everyone!