Understanding FICO® Scoring

[dallas01]

I was wondering when an account such as a collection updates every month does that continue to hurt your fico score? Would you loose points for the collection being on the report and then also every month when they report it after that?

If this is the case it is better to go ahead a pay a collection that reports every month. I've heard it won't help your score to pay a collection.

Message Edited by dallas01 on 04-29-2007 08:38 AM

[dekrist]

My understanding is yes it does hurt your score but as it ages it is not as bad as lets say a new negative added to your report. Also a paid is better than unsatisfied but if you do pay expect to take a dip for that as well. I paid one and went down 16 points but in time i expect to recover those points.

[Brammy]

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dallas01 wrote:

I was wondering when an account such as a collection updates every month does that continue to hurt your fico score? Would you loose points for the collection being on the report and then also every month when they report it after that?

If this is the case it is better to go ahead a pay a collection that reports every month. I've heard it won't help your score to pay a collection.

Message Edited by dallas01 on 04-29-2007 08:38 AM

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An account updating doesn't really hurt your score it just makes sure FICO never forgets.  If an account hasn't updated in sometime then decides 6 mos later to update the status THAT can hurt you as FICO tends to give less credence for accounts it considers inactive.  That being said, once a colelction is paid off it stops updating therefore having less and less impact as time passes

Message Edited by Brammy on 04-29-2007 11:53 AM

[dallas01]

Thanks for the replys. Thats the info I needed.

I'm not sure about the fico score but my fako score with EQ dropped by 13 points and I can't figure out why. It doesn't look like anything has hit.

Message Edited by dallas01 on 04-29-2007 08:55 AM

Message Edited by dallas01 on 04-29-2007 08:56 AM

[dekrist]

have you had any inquiries or CC increases? My wife got dinged for 7 points for one inquiry