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.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.
Paying them off should help your score, since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise. If it was me, I'd leave the 2018 alone but pay the 2019 one, since the 2018 will be falling off fairly soon. (You can also for early exclusion a few months before the 2018 is due to fall off). Congratulations on all your rebuilding work so far!
If you can pay them off easily, I say pay them off.
I would try to negotiate the amounts lower and negotiate them removing negative reporting.
If it is not easy to pay them off, dont pay anything. They will fall off.
If you start a payment plan or send them 1 cent, everything resets timeline wise.
It will be 7 more years before those accounts fall off.
Paying them off may actually hurt your score a little, but if you have the money, its the right thing to do.
Also, having open collection accounts can be an auto-decline from credit unions and banks.
There is more the a credit file than the score.
DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!
@Shooting-For-800 wrote:
If you start a payment plan or send them 1 cent, everything resets timeline wise.
It will be 7 more years before those accounts fall off.
This is simply not true. A payment plan or a partial payment does not reset ANYTHING. Entering into a payment plan or making partial payment and then not following through "can" establish a new SOL (for which you can be sued) under certain conditions, but that has nothing at all to do with reporting.
OP wrote:
.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.
Adkins wrote:
Paying them off should help your score since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise.
I am by no means an expert, but I don't think that at this point monthly collection updates are damaging to OP's score. The longer the collection has been on the report the less impact it has on the score. The last collection I had was 2 years old and the CA was updating as unpaid twice a month. When it was removed I gained about 30 points with Equifax and Experian, but only about 11 points with Transunion. My score did not go down when they re-updated mid-month. It seems like you lose all of your points up front when the collection hits. It might cause a "ceiling" where you can't attain past a certain credit score while it's still listed on your CR, but I don't think it causes a monthly score drop after the initial damage.
** Someone please correct me if I'm wrong! This is anecdotal evidence based on my own experience! **
@Anonymous wrote:@OP wrote:
.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.
Adkins wrote:
Paying them off should help your score since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise.
I am by no means an expert, but I don't think that at this point monthly collection updates are damaging to OP's score. The longer the collection has been on the report the less impact it has on the score. The last collection I had was 2 years old and the CA was updating as unpaid twice a month. When it was removed I gained about 30 points with Equifax and Experian, but only about 11 points with Transunion. My score did not go down when they re-updated mid-month. It seems like you lose all of your points up front when the collection hits. It might cause a "ceiling" where you can't attain past a certain credit score while it's still listed on your CR, but I don't think it causes a monthly score drop after the initial damage.
** Someone please correct me if I'm wrong! This is anecdotal evidence based on my own experience! **
Adkins is correct. You aren't wrong, but you aren't entirely right, its really more a matter of semantics. Yes, the damage is really done when the collection is initially reported, but if it is updating every month, you are always at month 0 and never distancing yourself from a derogatory event. Once a collection is paid and that payment is reported, you start getting farther and farther from a derogatory event and your score can start to rebound. Paying a collection off will not hurt your score, but it won't necessarily help it either depending on your profile.
@Anonymous wrote:@OP wrote:
.. if they are still reporting every month, will paying it off hurt my score? Will it help my score going forward if it is paid, or does it not matter until they fall off the report.
Adkins wrote:
Paying them off should help your score since updated collections each month hurt more. Once the account is zero, it will stop updating monthly and your score will rise.
I am by no means an expert, but I don't think that at this point monthly collection updates are damaging to OP's score. The longer the collection has been on the report the less impact it has on the score. The last collection I had was 2 years old and the CA was updating as unpaid twice a month. When it was removed I gained about 30 points with Equifax and Experian, but only about 11 points with Transunion. My score did not go down when they re-updated mid-month. It seems like you lose all of your points up front when the collection hits. It might cause a "ceiling" where you can't attain past a certain credit score while it's still listed on your CR, but I don't think it causes a monthly score drop after the initial damage.
** Someone please correct me if I'm wrong! This is anecdotal evidence based on my own experience! **
The thing is yours was only two years old. Very little score difference between a two year old collection and a brand new one.
I was under the impression that the date a collection account is added doesn't matter, that it is the DOFD listed on the collections account. So a brand new collections for a 6 year old debt is scored as being 6 years old.