Question

[Anonymous]

So I am trying to repair things and decided to pay last Tax Lien of $1,800 and a $2,000 credit card that's in collections. Will paying the collections help my scores go up and approximetly how many points?

[RobertEG]

FICO is a measure of risk of becoming delinquent.

Prior delinquencies are a primary factor in estimating chance of future delinquencies, and are not negated by subsequent payment of the debt.  They are still scored the same.

The collection must be deleted to remove its adverse scoring.

Debt collectors are instructed by the CRAs not to delete their reported collections based on payment of the debt, so it is usually difficult to obtain PFD deletions, but they can still choose to do so.

My suggestion is to make an offer to pay the collection in exchange for agreement to delete their collection rather than simply paying.

Tax liens are usually obtained from public records, and thus normally have no traditional furnisher of the information to which a PFD offer can be made.

[NewbieReed]

^^ Ditto the PFD suggestion. 

biggest mistake i made in the past is paying items without negotiating a deletion first. Dont do it! 

[Anonymous]

Who do i talk to for the PFD? Chase or Nationwide Collection?

[NewbieReed]

2 methods that I know of:

1. Talk to Whoever currently has the balance first- which I assume is Nationwide collections. get them to agree for PFD in writing. Pay, they delete, then GW the OC. 

2. Talk to the OC about re-calling the account if you do a PFD. OC pulls the account back from the CA, then you PFD with the OC and DV the CA -which turns into a deletion because they no longer have the debt and cannot validate. 

[-NewGuy-]

I would start with whoever has the actual collections entry on your credit report.

[Anonymous]

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@RobertEG wrote:

FICO is a measure of risk of becoming delinquent.

Prior delinquencies are a primary factor in estimating chance of future delinquencies, and are not negated by subsequent payment of the debt.  They are still scored the same.

The collection must be deleted to remove its adverse scoring.

---

I think its more accurate to say FICO is an *attempt* to measure the risk of becoming delinquent. And IMHO, its a pretty poor attempt. For one, it fails to take into account the single biggest factor in preventing delinquencies, and thats having adequate savings and backup resources to replace lost income for several years. FICO does not take such factors into account - if it did it would be far more accurate. Second, its relatively easy to 'game the system' with enough knowledge of how it works.

To be honest, past performance is seldom indicative of future performance for many debtors, just like its not indicative of future stock market performance or future real estate market performance. One has only to read the number of posts in forums like this that begin with "Two years ago I had a score of 780" and end with "so my BK was discharged two months ago, how do I rebuild?" to realize that as a predictor of default risk, FICO is actually a pretty poor tool.

Yeah, feeling pretty cynical tonight.

[Anonymous]

i looked at my reports and Nationwide credit isnt listed on my credit reports Chase is with the balance owed.They are reporting each month because the balance decreases by a $104. that I pay Nationwide. I have a 24 month payment plan with them. I wa dthinking that if I paid this in full it would help my scores out. I am going to pull some PFd letters today and draft one up for Chase and Nationwide to see if they will do the PFD.

[ezdriver]

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@Anonymous wrote:

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@RobertEG wrote:

FICO is a measure of risk of becoming delinquent.

Prior delinquencies are a primary factor in estimating chance of future delinquencies, and are not negated by subsequent payment of the debt.  They are still scored the same.

The collection must be deleted to remove its adverse scoring.

---

I think its more accurate to say FICO is an *attempt* to measure the risk of becoming delinquent. And IMHO, its a pretty poor attempt. For one, it fails to take into account the single biggest factor in preventing delinquencies, and thats having adequate savings and backup resources to replace lost income for several years. FICO does not take such factors into account - if it did it would be far more accurate. Second, its relatively easy to 'game the system' with enough knowledge of how it works.

To be honest, past performance is seldom indicative of future performance for many debtors, just like its not indicative of future stock market performance or future real estate market performance. One has only to read the number of posts in forums like this that begin with "Two years ago I had a score of 780" and end with "so my BK was discharged two months ago, how do I rebuild?" to realize that as a predictor of default risk, FICO is actually a pretty poor tool.

Yeah, feeling pretty cynical tonight.

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The FICO scoring system is the best that lenders have and it has served them well else they won't still be using it. While not perfect, it has served the industry well. Automated underwriting could not occur without it. For the consumer, more access to credit [as a result of FICO] is a good thing. It is ok to be cynical. It is necessary to be practical.

[Anonymous]

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@ezdriver wrote:

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@Anonymous wrote:

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@RobertEG wrote:

FICO is a measure of risk of becoming delinquent.

Prior delinquencies are a primary factor in estimating chance of future delinquencies, and are not negated by subsequent payment of the debt.  They are still scored the same.

The collection must be deleted to remove its adverse scoring.

---

I think its more accurate to say FICO is an *attempt* to measure the risk of becoming delinquent. And IMHO, its a pretty poor attempt. For one, it fails to take into account the single biggest factor in preventing delinquencies, and thats having adequate savings and backup resources to replace lost income for several years. FICO does not take such factors into account - if it did it would be far more accurate. Second, its relatively easy to 'game the system' with enough knowledge of how it works.

To be honest, past performance is seldom indicative of future performance for many debtors, just like its not indicative of future stock market performance or future real estate market performance. One has only to read the number of posts in forums like this that begin with "Two years ago I had a score of 780" and end with "so my BK was discharged two months ago, how do I rebuild?" to realize that as a predictor of default risk, FICO is actually a pretty poor tool.

Yeah, feeling pretty cynical tonight.

---

The FICO scoring system is the best that lenders have and it has served them well else they won't still be using it. While not perfect, it has served the industry well. Automated underwriting could not occur without it. For the consumer, more access to credit [as a result of FICO] is a good thing. It is ok to be cynical. It is necessary to be practical.

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I admit its the "best that lenders have" but IMHO, its far from the "best it *could* be".