Will paying a collection lower my score?

[Anonymous]

I have a charged off account that was fraudulent that we just found out about.  It is about 13 months old.  Should I just pay it off as it has been disputed twice and is still showing on all 3 credit bureaus.  It is not a large amount (under 500).  I don't want my score to drop though and have heard that in the past this was the case.  I had another collection that I just found out about that is from 04 for $309 and and undecided if I should just pay it off as well. 

I was told that the new fico 08 scoring system fixed the problem from before that when you paid off an old account the current activity on the account changed the weight of the account on your score, therefore lowering your score even though you paid it off.

Mickie

[Anonymous]

Mickie, I would recommend paying off whatever you feel that you are responsible for. i spent 2 years paying $25 per week and let me tell you....it was worth it!

[Anonymous]

the collection account and the charge off total around 800.  I could pay them off at the end of the month no problem.  I was unaware of the colelction until just now and the charge off is an invalid account.  My question is whether it will (in the short term) lower, raise, or be indifferent to my credit score.  I am buying a house this summer and do not want anything to lower my score.

[RobertEG]

The best path to take when dealing with a CO or collection account is to first offer to pay in exchange for their agreement to delete if from your credit report.  This is called a pay-for delete (PFD).

Paying off a collection account does not in itself get it off of your report.  It can say on for 7 1/2 years from the date of the delinquency that led to the charge off or collection activity by the creditor.

If you simply pay it without pursuing a PFD, the creditor wll then have their money, and thus no motivation to delete it from your CR.  It will then be with you for 7 1/2 years from the account delinquency date.

[Anonymous]

I can actually contribute to this too! I had three collections that are reported as opened around 10/06 that I paid months ago and decided to do a PFD after the fact. I paid down a few accounts so I can't say exactly how much this helped my score, but yes it gave me a nice bump. It all depends where you are and what else is on there I'd say but it should help you too! Good luck and keep us posted.

[Anonymous]

Start with the most recent collection. Paying it won't do anything for your score, unfortunately...but remember FICO scoring isn't the end-all and be-all of creditworthiness. Paid collections do look better than unpaid when a human being reviews your credit report.