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Member
justin_case
Posts: 7
Registered: ‎03-13-2007

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
Brammy
Posts: 5,436
Registered: ‎03-10-2007

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
justin_case
Posts: 7
Registered: ‎03-13-2007

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
Brammy
Posts: 5,436
Registered: ‎03-10-2007

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

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