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open ca vs.paid ca

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Anonymous
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open ca vs.paid ca

ok this is a debt i just paid last week..it was updated only to one bureau..so my question is..what is the difference in how it is scored?...this is how it appears on my TU
 
                                            EXPERIAN                                                         EQUIFAX  
 
 
creditor name:               equidata
 
account no:           
 
original creditor               COX CABLE OF HPT RDS                              COX CABLE OF HP             
 
responsibility                   INDIVIDUAL                                                          INDIVIDUAL
 
condition                            OPEN                                                                       PAID
 
original balance                      $40                                                                       $40
 
balance                                                                                                                  $0
 
date opened                      07/2004                                                                   07/2004
 
date reported                   06/27/2008                                                               06/2008
 
i spoke with this collector on monday and they agreed to delete to flag my account for deletion. but for the purpose of understanding..how does it affect my scores right now?..any answers/comments will be greatly appreciated!!
 
Message 1 of 7
6 REPLIES 6
Anonymous
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Re: open ca vs.paid ca

There is no difference in scoring.  When it comes to collections, paid vs. unpaid makes no difference to FICO.
 
Message 2 of 7
Anonymous
Not applicable

Re: open ca vs.paid ca

awww you gotta be kidding me..so basically..it was paid for nothing?..lol..and the only way a score can go up is if it was deleted?...hmm...thats strange because when this post onto my report my tu fako score went up...
Message 3 of 7
Anonymous
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Re: open ca vs.paid ca



UNSTOPPABLE wrote:
awww you gotta be kidding me..so basically..it was paid for nothing?..lol..and the only way a score can go up is if it was deleted?...hmm...thats strange because when this post onto my report my tu fako score went up...


FAKOs are useless.  Looking at them and relying on them can sometimes even be counterproductive and misleading, as in this case.
 
The fact that FICO doesn't care if a collection is paid or unpaid is the reason you will not see veteran posters recommending you pay a collection to improve your score.  They always say to get a PFD if you can.  Otherwise, you may still want to pay it for the following reasons:
 
1) If you don't pay it, the creditor may sue you.  A judgment on one's reports looks much worse than a collection account.
 
2) Some creditors, mortgage lenders in particular, will require that collections be paid as a condition of receiving a loan.
 
3) It looks better on manual review.
 
4) It's the right thing to do, assuming the debt is valid and you actually owe it.
 
Message 4 of 7
Anonymous
Not applicable

Re: open ca vs.paid ca

Unfortunately, Cheddar is correct: paying a charge-off or collection does nothing to improve your score. However, he gave some valid reasons why you may find paying it off anyway to be in your best long-term interest. In any event, go for a PFD.
Message 5 of 7
RobertEG
Legendary Contributor

Re: open ca vs.paid ca

Cheddar has hit the cheese on the head!
Seriously, unstoppable, you did not pay it off for nothing.  While it may not affect FICO scoring directly, any lendor doing a manual review will, upon seeing an unpaid debt, most probably see you as one inclined to skip out on debt.  This forum site is about credit scoring, and is not focused primarily on lendor approval of credit. So advice directed only to scoring is not the whole picture.  Most lendors, particularly in the tightening markets, do manual reviews, and an unpaid debt stands out.  Also be aware that, under the FCRA, if you should apply in the future for any loan or insurance of $125K or above, the normal 7 year reporting limits of the FCRA are exempted, so it could stay with  you forever as unpaid debt, and not simply fall off after 7 years.
Message 6 of 7
Anonymous
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Re: open ca vs.paid ca

robert thankyou for replying..i didnt see your post update on my dashboard....
Message 7 of 7
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