topic Re: Collection Account in Rebuilding Your Credit

Collection Account

rayzah — Fri, 04 Feb 2011 22:21:18 GMT

I just paid off a collection account to the CA, will that impact my score even if they refused a PFD?

Re: Collection Account

Datx — Fri, 04 Feb 2011 23:14:25 GMT

From what I know...a paid collection account is the same as a unpaid collection account when it comes to FICO scores. It may help when a potential creditor manually reviews your CR and see a paid collection account instead of a unpaid one, but it does not help your score. You want that collection account deleted. So the next step for you, since you have now paid them, is a GW deletion.

Re: Collection Account

MarineVietVet — Fri, 04 Feb 2011 23:29:30 GMT

@MyCreditStinks wrote:
From what I know...a paid collection account is the same as a unpaid collection account when it comes to FICO scores. It may help when a potential creditor manually reviews your CR and see a paid collection account instead of a unpaid one, but it does not help your score. You want that collection account deleted. So the next step for you, since you have now paid them, is a GW deletion.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Collection Account

rayzah — Fri, 04 Feb 2011 23:33:16 GMT

so i will only see a one point increase? so if i can get a delete will it be that much more of an increase?

Re: Collection Account

MarineVietVet — Sat, 05 Feb 2011 03:38:28 GMT

@rayzah wrote:
so i will only see a one point increase? so if i can get a delete will it be that much more of an increase?

I'm sorry. I didn't mean to confuse you. When someone types "+1" it just means they agree with a previous post.

As was already said a collection is scored the same whether paid or not so paying it will not do anything to your score.

Re: Collection Account

RobertEG — Sat, 05 Feb 2011 04:11:38 GMT

The basic concept to keep in mind is that FICO scores derogs in past payment history, and that payment of a debt does not erase the existence of derogs that preceded its payment. FICO is any analysis of payment risk, and not credit-worthiness. Prior derogs are viewed by FICO was being a very high predictor of the liklihood of future defaults. Ultimate payment is not.

Showing that you paid prior debt may be important to a creditor's view of your future credit-worthiness,but that is not the role of your three-digit FICO score.

Re: Collection Account

rayzah — Sat, 05 Feb 2011 04:51:47 GMT

I see, but I'm just trying to make my credit look as good as I can so i can get a auto loan within the next month. I know they say it takes time for your credit score to improve but I needed a car yesterday, and if I atleast pay of my collection accounts hopefuly the banks will show some pity on me.

Re: Collection Account

MarineVietVet — Sat, 05 Feb 2011 07:21:54 GMT

@rayzah wrote:
I see, but I'm just trying to make my credit look as good as I can so i can get a auto loan within the next month. I know they say it takes time for your credit score to improve but I needed a car yesterday, and if I atleast pay of my collection accounts hopefuly the banks will show some pity on me.

Yes it very well could help you if a person doing a manual review sees you have paid your debt. An added bonus to paying this collection is you don't ever have to worry about CA's trying to collect on this debt in the future.