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Justin_Bailey wrote:
By "Amounts Owed" they are really talking about credit utilization. Since a collections account isn't technically utilizing anything (you could call it a "dead" account), paying it off doesn't do anything to help your utilization. Once an account goes to collections, the only thing you can do is wait 7 years for it to get off your report.
okrogius wrote:Amounts owed does include utilization and it's a major portion of it, but that's not everything. For instance how many accounts have balance is a factor.The note about collections is wrong - a collections account can still count in utilization. And only thing you can do is wait 7 years is at best a very pessmistic passive view, especially if the information is incorrect.
okrogius wrote:Amounts owed does include utilization and it's a major portion of it, but that's not everything. For instance how many accounts have balance is a factor.�The note about collections is wrong - a collections account can still count in utilization. And only thing you can do is wait 7 years is at best a very pessmistic passive view, especially if the information is incorrect.
No. Delinquencies reduce your credit score because they're viewed as evidence of a weak commitment toward meeting your obligations. This evidence of your attitude toward debt is not wiped away when you repay the delinquent loans. They stay on your record for seven years. However, their weight in your credit score gradually declines with the passage of time, provided your recent payment record is better. "