topic Re: Paid Collections still affecting my score-what can I do? in Understanding FICO® Scoring

Paid Collections still affecting my score-what can I do?

Anonymous — Sun, 30 Jun 2013 14:55:59 GMT

I have two collections (one for a 2009 Credit Card, and one for a cancellation fee of AT&T). Both collections started in 2007, when I was out of job.

Both were paid in full in 2009, both still appear in my credit history as per today. MyFico report indicates these two items will remain in my credit history until 2016. :-(

Is there any way I can clear these from my record? I tried to do a dispute, but it came back as "verified" :-(

In 2012 I did a major improvement in my credit score, starting at 550 last year, now I am at 690. Effort included paying off some debt, and getting a new AmEx credit card (using my husbands existing account). Since we use the card every month, and pay it in full every month, both our scores improved tremendously during 2012.

But it seems that I cannot take my credit score into the 700's because of these two paid-collection items mentioned above.

Any recommendations?

Re: Paid Collections still affecting my score-what can I do?

Shogun — Sun, 30 Jun 2013 15:58:21 GMT

A paid collection will stay on your CR. Unfortunately paying it doesn't remove it. Your best course of action would to be start the GW process and see if you can get them off that way. GWs work, I can attest to that.

Re: Paid Collections still affecting my score-what can I do?

TeeGee — Mon, 01 Jul 2013 06:32:04 GMT

What is a GW? I have a similar situation with an old CA that is NOT paid, and I haven't touched it, because I heard if you have an old CA like that to let it alone. By paying it so late, I will only extend it into 2020!!! (I posted my particular problem in another thread about a southwest card under credit cards).

Not sure what a GW is. Thanks.

Re: Paid Collections still affecting my score-what can I do?

Shogun — Mon, 01 Jul 2013 14:36:07 GMT

A GW is a Goodwill. That's where you write them a letter telling them about your situation and politely ask for them to remove their posting.

Re: Paid Collections still affecting my score-what can I do?

bluescale — Mon, 01 Jul 2013 15:05:41 GMT

@TeeGee wrote:
I heard if you have an old CA like that to let it alone. By paying it so late, I will only extend it into 2020!!!

Is that true? I didn't think paying on an outstanding debt reset the clock on when it drops off your report. That seems counter productive to getting people to pay their debts.

Re: Paid Collections still affecting my score-what can I do?

Anonymous — Mon, 01 Jul 2013 15:09:36 GMT

@bluescale wrote:
@TeeGee wrote:
I heard if you have an old CA like that to let it alone. By paying it so late, I will only extend it into 2020!!!

Is that true? I didn't think paying on an outstanding debt reset the clock on when it drops off your report. That seems counter productive to getting people to pay their debts.

NO, absolutely NOT true. Nothing extends the reporting time. The time it falls off your report is a federal law and cannot be changed.

What can happen by paying an older CA that has not reported in years is it will update to a current date appearing to be a newer collection and drop your score.

Re: Paid Collections still affecting my score-what can I do?

bluescale — Mon, 01 Jul 2013 15:18:25 GMT

@Anonymous wrote:
@bluescale wrote:
@TeeGee wrote:
I heard if you have an old CA like that to let it alone. By paying it so late, I will only extend it into 2020!!!

Is that true? I didn't think paying on an outstanding debt reset the clock on when it drops off your report. That seems counter productive to getting people to pay their debts.
NO, absolutely NOT true. Nothing extends the reporting time. The time it falls off your report is a federal law and cannot be changed.

What can happen by paying an older CA that has not reported in years is it will update to a current date appearing to be a newer collection and drop your score.

I'm guessing the drop would be temporary. And having an unpaid collection on your record is much more detrimental than a paid collection.

@TeeGee - I would recommend trying a Pay For Delete with the collection agency.

Re: Paid Collections still affecting my score-what can I do?

Anonymous — Mon, 01 Jul 2013 15:43:33 GMT

@bluescale wrote:
@Anonymous wrote:
@bluescale wrote:
@TeeGee wrote:
I heard if you have an old CA like that to let it alone. By paying it so late, I will only extend it into 2020!!!

Is that true? I didn't think paying on an outstanding debt reset the clock on when it drops off your report. That seems counter productive to getting people to pay their debts.
NO, absolutely NOT true. Nothing extends the reporting time. The time it falls off your report is a federal law and cannot be changed.

What can happen by paying an older CA that has not reported in years is it will update to a current date appearing to be a newer collection and drop your score.
I'm guessing the drop would be temporary. And having an unpaid collection on your record is much more detrimental than a paid collection.

@TeeGee - I would recommend trying a Pay For Delete with the collection agency.

The drop would not be temporary. It would be the same as if a new collection just hit your report. Paid and unpaid collections are scored the same by FICO. To creditors a paid collection will look better.

Getting a PFD is the only way to improve your score.

Re: Paid Collections still affecting my score-what can I do?

bluescale — Mon, 01 Jul 2013 15:56:01 GMT

@Anonymous wrote:
The drop would not be temporary. It would be the same as if a new collection just hit your report. Paid and unpaid collections are scored the same by FICO. To creditors a paid collection will look better.

Getting a PFD is the only way to improve your score.

So, to make sure I understand correctly, paying it poses no benefit as far as FICO score goes, but it will help when it comes to manual review.

Re: Paid Collections still affecting my score-what can I do?

Anonymous — Mon, 01 Jul 2013 16:32:52 GMT

Yes, you are correct. Paid and unpaid are scored the same by FICO, as a collection. Manual reviews would see it as paid and that is a good thing.

Re: Paid Collections still affecting my score-what can I do?

Anonymous — Sun, 07 Jul 2013 20:36:13 GMT

THANK YOU!!!