topic scorewatch question in Understanding FICO® Scoring

scorewatch question

whodatnation2 — Wed, 11 Jan 2012 00:41:03 GMT

I have been reading that a collection, whether paid or unpaid, effects fico scoring the same way. However, I read on my scorewatch report that paying off a collection and having it report as paid helps with your fico scoring........any thoughts???

Re: scorewatch question

pizzadude — Wed, 11 Jan 2012 00:57:50 GMT

A collection or your CR, either paid or unpaid, is a major derogatory item and it will ding your score. Paying the collection will not improve your score IMO, at least I have never seen it work this way.

Re: scorewatch question

whodatnation2 — Wed, 11 Jan 2012 01:25:09 GMT

Thanks for the response. This is what is on my scorewatch report....word for word.

Pay off collections, judgments, or tax liens.
Unpaid collections, unsatisfied judgments, and unreleased tax liens are all evidence that you have not paid your debts in the past. Paying off the debts that resulted in a collection, judgment, or tax lien won't remove it from your credit report, but it will reduce the damage it causes to your score. But be aware that paying off a collection, judgment, or tax lien will make it recently active, which could cause your score to drop in the short term.

Re: scorewatch question

pizzadude — Wed, 11 Jan 2012 04:03:31 GMT

@whodatnation2 wrote:
Thanks for the response. This is what is on my scorewatch report....word for word.

Pay off collections, judgments, or tax liens.
Unpaid collections, unsatisfied judgments, and unreleased tax liens are all evidence that you have not paid your debts in the past. Paying off the debts that resulted in a collection, judgment, or tax lien won't remove it from your credit report, but it will reduce the damage it causes to your score. But be aware that paying off a collection, judgment, or tax lien will make it recently active, which could cause your score to drop in the short term.

Yeah, perhaps you would get a small boost, but dollars for doughnuts it will be small if/when it shows up. And note the last sentence about last activity date ~ when it changes the last active date you will get dinged, again.