topic Re: Paid off an account in collection. When can I expect an increase in credit score. in Credit Cards

Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 01:23:04 GMT

Hello all, I owed ~$5K on a credit card that had been in collection for some time. I recently paid the amount off in full. Can I expect an instantaneous improvement in my credit score? At present I have only one credit card with a balance that I pay off every month religiously. Any info is much appreciated! Many thanks, Aaron

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 03:49:51 GMT

Hi Aaron, and welcome to the forum.

Gosh I wish you would have asked here what to do before you paid off the collection.

I hate to be the bearer of bad news, but a paid collection will not increase your score but very little, if at all. It will show on your credit report as paid collection, which is almost as bad as a collection itself.

You can start GW'ing(writing goodwill letters to remove the item completely off your cr)

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 03:55:23 GMT

also from what i understand if this was a collection account from a while back, the recent activity could cause it to update on your reports and actually cost you some points.

Message Edited by dnm45227 on 03-26-2008 11:55 PM

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:02:19 GMT

Thanks for the replies. UGGGHHH, now I feel like a total idiot. I really thought I was doing the right thing... OK, here's the deal. I wired the money which won't arrive before Friday. Should I call and try to negotiate a "deal" to have the bad credit removed from my report if I pay it in full (of course I already have, but they don't know that yet)? Assuming that they get the money that will pay off my debt to them (which will bring my revolving debt to zero), what is my best move? Should I write asking for clemency? Can that even be done? I'm glad I found this forum - just wished I had done it sooner! -TW

Message Edited by topwest on 03-26-2008 09:02 PM

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:05:28 GMT

topwest wrote:
Thanks for the replies. UGGGHHH, now I feel like a total idiot. I really thought I was doing the right thing... OK, here's the deal. I wired the money which won't arrive before Friday. Should I call and try to negotiate a "deal" to have the bad credit removed from my report if I pay it in full (of course I already have, but they don't know that yet)? Assuming that they get the money that will pay off my debt to them (which will bring my revolving debt to zero), what is my best move? Should I write asking for clemency? Can that even be done? I'm glad I found this forum - just wished I had done it sooner! -TW

Message Edited by topwest on 03-26-2008 09:02 PM

Let's back up a bit. I'm confused by one statement in this post:

topwest wrote:
Assuming that they get the money that will pay off my debt to them (which will bring my revolving debt to zero), what is my best move?

Is this account with a CA? If so, it doesn't count as revolving debt. Is the OC still reporting, and if so, are they reporting a balance as well?

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:12:01 GMT

@ cheddar. According to freecreditreport.com, the ~$5K I just paid counted as "revolving debt." It had been sent from Amex to a collection agency some time ago. With this payment I'll have no revolving debt but still some student loans (installment debt according to FCR) - I think. Message Edited by topwest on 03-26-2008 09:11 PM

Message Edited by topwest on 03-26-2008 09:12 PM

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:12:26 GMT

topwest wrote:
@ cheddar. According to freecreditreport.com, the ~$5K I just paid counted as "Revolving debt." With this payment I'll have no revolving debt but still some student loans (installment debt according to FCR).

Is the account that is reporting this balance a CA (collection agency) or an OC (original creditor, in this case a credit card company), or both?

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:14:58 GMT

When I look at the freecreditreport.com entry, it says the company name is AMEX. That said, I know it was handed over to a collection ag3ency as when I called AMEX to talk to them they gave me the number for the CA. Many thanks for your help BTW.

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:23:38 GMT

topwest wrote:
When I look at the freecreditreport.com entry, it says the company name is AMEX. That said, I know it was handed over to a collection ag3ency as when I called AMEX to talk to them they gave me the number for the CA. Many thanks for your help BTW.

OK, that's why. It is only the OC that is reporting, so in this case, yes, it does count as revolving debt.

Normally when a CA is collecting on an account, they report as a separate account. THAT is the account that can kill your score, and THAT is the account that it will do no good to pay.

In your case, though, since the CA is not reporting but Amex is, paying it off was the absolute best thing you could do.

DO NOT cancel that wire transfer.

Happy to help, BTW!

Message Edited by cheddar on 03-27-2008 12:23 AM

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:27:26 GMT

Just wanted to add that you should make absolutely sure that once your payment goes through, Amex updates the balance on the account to $0 within 30 days or so. If they don't, bug them about it, and if they still don't, post back here to get some more help on how to entice them to cooperate.

Since the account was in collections, I'm assuming you still have a number of late payments associated with the account. Unfortunately, those will continue to haunt you, but paying that past due balance will help your score as soon as the new $0 balance is reported.

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:29:03 GMT

PHEW!!! You guys ROCK. I can't thank you enough! At this stage would you recommend a GW to AMEX? Honestly, I screwed up and was irresponsible. I'm getting my act together and trying to make things right. I'm tempted to call them and ask for a new card as I've turned a new leaf and want to get back in their good graces. Think they'll scoff at that!?

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:31:38 GMT

topwest wrote:
PHEW!!! You guys ROCK. I can't thank you enough! At this stage would you recommend a GW to AMEX? Honestly, I screwed up and was irresponsible. I'm getting my act together and trying to make things right. I'm tempted to call them and ask for a new card as I've turned a new leaf and want to get back in their good graces. Think they'll scoff at that!?

It never hurts to ask. In all honesty, though, GW is TOUGH with Amex. They're sticklers.

Maybe someone who has successfully gotten GW from them can post here and let you know how they did it.

Can I ask how many lates you have on this account, how severe they are (30, 60, 90, 120), and how old they are? Just trying to gauge approximately how much the account is hurting you.

Re: Paid off an account in collection. When can I expect an increase in credit score.

Anonymous — Thu, 27 Mar 2008 04:38:36 GMT

Frankly, I don't know. I sorta dropped off the face of the earth for a while and I'm just crawling my way back . The balance date on that entry is 12/23/2004 according to FCR. I got an e-mail from FCR on 03/21/2008 alerting me to the entry (I signed up for FCR shortly before that). My credit score is 662 - not terrible, but I'm looking to improve it as much as humanly possible (as quickly as possible).