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The subject pretty much says it all. Say my FICO is at X with an unpaid collection from about three years ago and I decide to pay it. Will my score drop at all? It is with a third party collector on behalf of CACH.
Also, with the collection being unpaid, creditors can see that I haven't paid this right (because it posts a balance on my credit reports)?
There should be no score change - FICO scores them the same, paid or unpaid. Although yes, creditors can see there's an unpaid balance.
Unfortunately, your score will probably be the same. Paid or undpaid collections is scored the same way. The only benefit from a paid collection is during a manual review (like applying for a mortgage loan).
Your best bet is to see if they will accept PFD. Good luck!
It seems to depend on how the account reports - I've seen instances where a balance factors into your utilization when the OC reports it, but not necessarily when the CA reports. I would like to think that a paid collection that continues to report will look good (or at least better) upon a manual review of your report (recon for a CC, mortgage, etc).
I paid off an old collection and I just got a score report (about an hour ago) that my score increased 34 points as a result. 650 to 684
@txmomma26 wrote:It seems to depend on how the account reports - I've seen instances where a balance factors into your utilization when the OC reports it, but not necessarily when the CA reports. I would like to think that a paid collection that continues to report will look good (or at least better) upon a manual review of your report (recon for a CC, mortgage, etc).
I read someplace (and drat that I can't find it now...) that charge-offs can factor into your utilization, while collections do not. I'll keep looking to see if I can figure out where I picked that up....but you're right, it is better when a creditor does a manual review if they see "paid" on those. Mortgages, particularly.
Yes it is true that a CO from the OC account will factor into utilization if the CL and the balance are both reporting. Collections should never factor in but if they are put in the accounts section they can.
@guiness56 wrote:Yes it is true that a CO from the OC account will factor into utilization if the CL and the balance are both reporting. Collections should never factor in but if they are put in the accounts section they can.
Too funny - as I wrote my last post, I said out loud "Pretty sure I heard that from Guiness..." and here you are! You're like Mary Poppins, turning up just when you're needed. Thank you.
@InvincibleSummer3 wrote:
@guiness56 wrote:Yes it is true that a CO from the OC account will factor into utilization if the CL and the balance are both reporting. Collections should never factor in but if they are put in the accounts section they can.
Too funny - as I wrote my last post, I said out loud "Pretty sure I heard that from Guiness..." and here you are! You're like Mary Poppins, turning up just when you're needed. Thank you.
Lol. You are welcome.