Re: Improving Credit Scores
10-03-2012 01:21 PM
I know it may not seem right, but a paid collection is not any better than an unpaid. So you might not see a bump in score. You will need to send a GW letter to whoever you paid and ask if they will delete the TL.
That's true for FICO purposes; however, it's a completely different world when it comes to actually getting approved for anything if it's a paid vs. unpaid collection.
WFDS underwriter: "Oh come on, you have a $180 open collection? I just shake my head whenever I see someone with one of those."
DCU analyst: "Oh you have a collection, but it's paid, that's good"
I kid you not, almost word for word . It's always better to have demonstratably paid your debts, mistakes happen and while FICO doesn't make any distinction as to whether you made them right or not, banks themselves absolutely do care. The ballgame is more complicated than a simple FICO score for getting through underwriting.
That said, I wish I'd known about PFD as a chance before I paid it, but admittedly the collection was my own fault and it won't hurt me forever so long term it's irrelevant. Easy thing to talk around with an analyst / underwriter anyway once paid: "I was utterly stupid and it is completely my own fault..."
Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 660, Wally TU 697, EX unknown (05/13/13)
Goal Score: 680 in all three (01/01/14)
Take the FICO Fitness Challenge