Effects of settling in full on collection accounts.

[Anonymous]

Hi,

I know that settling on an account will not remove it from my report, but I was wondering if it would increase my score.

When I was 18, I went crazy with credit cards and other loans.  In less than a year, most, if not all, of my accounts were delinquent.  Most became collection accounts.  Some went on to be judgements.

I just recently, in the past 2 months, paid and/or settled all of the negative accounts.  I have about 7 or 8 accounts that were closed in good standing since then.  I have a credit card that I keep paid down to a zero balance, and a personal loan.  I have never been late on either of these accounts.

Will my score increase as these negative accounts are updated to "Settled in Full" or "Paid in Full"?

Thanks,

Jon

[Anonymous]

Welcome to the FICO Forums, johnhodges82!

What kind of accounts are these?  If they are collections, be aware that paying or settling a collection account will not improve your FICO scores one bit.  FICO scores paid/settled vs. unpaid collections the same.

[Anonymous]

depending on how old they are it could hurt your scores. by even paying an old collection the account will be scored as "recent collection activity" by fico.

[Anonymous]

Will they still be removed from my report 7 years from the first delinquency?

[Anonymous]

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jonhodges82 wrote:

Will they still be removed from my report 7 years from the first delinquency?

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7 to 7.5 years, yes.

[Anonymous]

7-7 1/2 seems to be the pattern.

[Anonymous]

On my reports, the negative items still show a "credit limit" and "balance", so would a zero balance not help util%?

Sorry for all the questions.  I have no clue about this.

[Anonymous]

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jonhodges82 wrote:

On my reports, the negative items still show a "credit limit" and "balance", so would a zero balance not help util%?

Sorry for all the questions.  I have no clue about this.

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This is why I asked above what kind of accounts these are.  I was operating under the assumption that they were collection accounts, but you never answered that question.

If they are revolving accounts, that changes the answer entirely.

What kind of accounts are they?

[Anonymous]

Would there be a difference between a charge-off and a collection?

[Anonymous]

all were either collection accounts, charge-offs, or judgements.  All have been paid or settled in full.