Reply
Member
Posts: 7
Registered: ‎03-13-2007
0

Paying Collections is drastically reducing score!!!

I have recently become smart about my credit score after being stupid for so many years. I had all three scores that ranged in the 500's. I went completely through my credit to pay of about $8,000 worth of collections so that I can raise my score to buy a home, by my scores are now dropping rapidly. One went down 40 points in 14 days. Was it a bad idea to pay the debts off? What can I do to start getting my score back up? I fear that it took 14- 30 days to drop rapidly and will take 10 times that to go back up.
 
Thanks
Moderator Emeritus
Posts: 5,436
Registered: ‎03-10-2007
0

If these collections haven't reported in sometime.  Its j...

[ Edited ]
If these collections haven't reported in sometime.  Its just that the score is picking them back up. Just be sure nothing new is reporting.  You would be required to pay off any collections anyway before a lender would touch you.  Give it 4 to six months, keep your utillization low and let your history age.  It won't be as bad you as you think.  Make sure you have the best mix of credit and try improving your cards from subprime (if thats what you have) to prime. 
 
I paid off three and it didn't take that long for my score to rebound from the initial ding, if I remember correctly.  Now if you are looking at a TU score from TrueCredit.  They haven't fixed the glitch that reages the collection for score purposes with new activity.  FICO has stop penalizing customers for paying off old debts


Message Edited by Brammy on 03-13-2007 08:45 PM
Member
Posts: 7
Registered: ‎03-13-2007
0

Thanks

Thanks, I think that getting some revolving credit might help too. I have not had any accounts with revolving credit in years. Does "piggybacking" of someone elses credit card really work? I could probably do something on my parents Sears card, but not really any major credit cards. Would this be worth it?
Moderator Emeritus
Posts: 5,436
Registered: ‎03-10-2007
0

If you know someone who has great credit with low utiliza...

[ Edited ]
If you know someone who has great credit with low utilization on their card you could ask them to put you on one of their oldest cards as an auth user.  It does work.  I found that it just works a little too well.  I added my 13 yr old so he could go to the mall with his friends instead of mom and he now gets better offers than I do.  He actually got offers for both the Amex Green and Gold rewards as well as Discover.  Of course I opted him out to prevent the mail from being delivered to the wrong place and the possibility of ID theft. I would try that before applying for revolving credit.
 
Once that account hits your score you should show improvement.  You can try orchard and household to establish.  They are good short term but the annual fees make them a loser in my book for the long term.  I started with that after BK with a 300.00 limit on Household.  Closed it and moved on to bigger and better and just got my first prime card with a limit of 7500, and 2% cash back from HSBC.
 
It just takes time. I forgot to mention that because I wasn't actively trying to correct and improve my score as recently as one year ago I was in the mid to low 500s.  I thought  that was as good as it got after BK but thanks to a bunsh of knowledgeable people I learned what I needed to do and increased my score well over 100 points in less than a year's time.


Message Edited by Brammy on 03-13-2007 09:37 PM

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.