How much does PAID delinquencies effect fico as opposed to UNPAID?

[Anonymous]

I have about $5000 in unpaid delinquent accounts (mostly medical bills that went to collections when I had no health insurance) and I'm ready to pay them all off in full, but wondering if it's even worth it to me. Does anyone know how much it will impact my fico score? I know that they will still stay on my report for seven years; but how much of an impact does it make to my score to have it listed as PAID instead of UNPAID. Anyone have information on this?? Thanks! Valerie

[Anonymous]

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momgoddess wrote:
I have about $5000 in unpaid delinquent accounts (mostly medical bills that went to collections when I had no health insurance) and I'm ready to pay them all off in full, but wondering if it's even worth it to me. Does anyone know how much it will impact my fico score? I know that they will still stay on my report for seven years; but how much of an impact does it make to my score to have it listed as PAID instead of UNPAID. Anyone have information on this?? Thanks! Valerie

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Okay if you don't pay them depending on how old they are they could continue to be sold to other CAs coming back to perpetually haunt you by dinging your FICO again and again.  If they are all one bill or from the same source, you run the risk of being sued and having a judgement placed on your file.  If you pay them off that all stops in its track.  IF you can afford to pay them off I would contact the CAs and offer to make settlement, don't give them any money util you get something in writing.

Paid deloinquencies stop updating and the more time passes the less impact they have on your score whereas, if they keep updating they are always considered in your active calculations.

Message Edited by Brammy on 05-06-2007 06:39 PM

[Anonymous]

First, find out the SOL on the debts. When it's beyond SOL, you have a lot more leverage. Medicals bills are likely written.

http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

Next, find out the DOFD (Date Of First Delinquency). Usually that's when the account when 120 days late. If these are from 2000, then they'll soon be dropping off your reports and you might wanna just wait 'em out. If they are from early 2000, dispute 'em as too old to be reported.

I speak from personal experience that paying a collection simply gives you a Paid Collection, and a Paid Collection is little better than an Unpaid Collection.

If they are listed on your CRs with CAs, then I would DV them first.

[Anonymous]

I would say if you already have the money allocated to pay these past debts to just use it and get it out of your life.

As far as what impact it will have on score, Brammy was right on the money.   Little to no effect in terms of increase.  FICO and the other CB's don't reward payment on CO's and collections but as he pointed out, if they were reporting each month, those dings will stop.

As Noah pointed out, try to figure out your last day of delinquency. and see where your bills fall in your state's Statute of Limitations before making any decsion not to pay your bills.   If these bills are still years within the SOL of your state, then pay them.

Also remember, even if these are due to fall off your report that doesn't mean the debt vanishes.  It's still there and these CA's can still try and collect and even try to sneak in a default judgment on you, even if it's past the SOL, so be careful if you choose to go this route.  Have all your paperwork with you and if you get a summons answer it and be prepared to go to court NO MATTER WHAT.

If these debts aren't close to the SOL, then paying them off is just the best move.   you already have the money allocated to do it, so I would just do it and let your credit healing begin.  

[Anonymous]

Whether you're under or out from under the SOL, never just pay a collection. The SOL merely determines how hard of a stand you can take.

Maybe they won't budge and maybe they'll demand every cent. But chances are very good they will budge.

And always DV a CA as soon as it shows up on your CRs or their letter hits your mailbox.