@Anonymous wrote:We have a collection reported from 2016. This collection is being reported as paid.
Will removing this collection have a negative impact on my credit score? I've read some posts that actually removing negative collections can lower your score vs raise it??
No it will not. You're removing a negative item after all.
Disputing an accurate collection and having it come back unsuccessful might have negative consequences. The disputing process is for inaccurate reporting.
@Anonymous wrote:Thanks. I wasn't planning to dispute.
I was going to ask the collection agency to remove it from reporting.
Good luck!
@PicoFico wrote:
@Anonymous wrote:We have a collection reported from 2016. This collection is being reported as paid.
Will removing this collection have a negative impact on my credit score? I've read some posts that actually removing negative collections can lower your score vs raise it??
No it will not. You're removing a negative item after all.
This is generally true.
There's a special case scenario where removal of a collection (or other derogatory) will actually cause your scores to drop: scorecard reassignment (rebucketing).
FICO has clean and dirty scorecards with "buckets" that categorize profiles based on what's present on their reports; profiles are then compared to others within the same bucket. If you have your last derogatory account removed, you would be rebucketed onto a scorecard for folks with no derogatories and, depending on how your overall profile compares to others in that same bucket (ie. account age, number of accounts, utilization, etc.), you could lose a few (or more) points.
It is more common to gain than to lose points though. And even if you are one of the rare cases to lose points after the removal of a derog - you need to look at the bigger/brighter picture - a clean report with a lower score is better than a dirty report with a higher score any day of the week. Any lost points will return over time and your scores will have a higher ceiling for growth.
I was one of the rare cases that lost points when my last derog was removed -- it kinda sucked to lose points but having a clean report was my goal so I was fine with it.
@Anonymous wrote:
@thornback wrote:
@PicoFico wrote:
@Anonymous wrote:We have a collection reported from 2016. This collection is being reported as paid.
Will removing this collection have a negative impact on my credit score? I've read some posts that actually removing negative collections can lower your score vs raise it??
No it will not. You're removing a negative item after all.
This is generally true.
There's a special case scenario where removal of a collection (or other derogatory) will actually cause your scores to drop: scorecard reassignment (rebucketing).
FICO has clean and dirty scorecards with "buckets" that categorize profiles based on what's present on their reports; profiles are then compared to others within the same bucket. If you have your last derogatory account removed, you would be rebucketed onto a scorecard for folks with no derogatories and, depending on how your overall profile compares to others in that same bucket (ie. account age, number of accounts, utilization, etc.), you could lose a few (or more) points.
It is more common to gain than to lose points though. And even if you are one of the rare cases to lose points after the removal of a derog - you need to look at the bigger/brighter picture - a clean report with a lower score is better than a dirty report with a higher score any day of the week. Any lost points will return over time and your scores will have a higher ceiling for growth.
I was one of the rare cases that lost points when my last derog was removed -- it kinda sucked to lose points but having a clean report was my goal so I was fine with it.
Hm, are you sure about that? What you're saying implies that FICO grades on a curve, and I don't think that's actually the case. Yes, the algorithm may be applied differently in different buckets, but you're not actually compared to other people in the same bucket. The FICO standards are what they are...you're implying that if other people in a bucket later their behaviors then the standards change, which I'm pretty sure isn't the case.
Compared in a sense, yes. People in the same bucket will still have varying profiles - aspects of which hold different weights within the algorithm being applied - which, as you noted, is applied differently depending on the bucket.
My explanation was the simplest way, in my opinion, to describe scorecards to the OP without getting overly technical. I, in no way, intended to suggest that FICO scores on a curve or has ever-changing standards.
@Anonymous wrote:
@thornback wrote:
@Anonymous wrote:
@thornback wrote:
@PicoFico wrote:
@Anonymous wrote:We have a collection reported from 2016. This collection is being reported as paid.
Will removing this collection have a negative impact on my credit score? I've read some posts that actually removing negative collections can lower your score vs raise it??
No it will not. You're removing a negative item after all.
This is generally true.
There's a special case scenario where removal of a collection (or other derogatory) will actually cause your scores to drop: scorecard reassignment (rebucketing).
FICO has clean and dirty scorecards with "buckets" that categorize profiles based on what's present on their reports; profiles are then compared to others within the same bucket. If you have your last derogatory account removed, you would be rebucketed onto a scorecard for folks with no derogatories and, depending on how your overall profile compares to others in that same bucket (ie. account age, number of accounts, utilization, etc.), you could lose a few (or more) points.
It is more common to gain than to lose points though. And even if you are one of the rare cases to lose points after the removal of a derog - you need to look at the bigger/brighter picture - a clean report with a lower score is better than a dirty report with a higher score any day of the week. Any lost points will return over time and your scores will have a higher ceiling for growth.
I was one of the rare cases that lost points when my last derog was removed -- it kinda sucked to lose points but having a clean report was my goal so I was fine with it.
Hm, are you sure about that? What you're saying implies that FICO grades on a curve, and I don't think that's actually the case. Yes, the algorithm may be applied differently in different buckets, but you're not actually compared to other people in the same bucket. The FICO standards are what they are...you're implying that if other people in a bucket later their behaviors then the standards change, which I'm pretty sure isn't the case.
Compared in a sense, yes. People in the same bucket will still have varying profiles - aspects of which hold different weights within the algorithm being applied - which, as you noted, is applied differently depending on the bucket.
My explanation was the simplest way, in my opinion, to describe scorecards to the OP without getting overly technical. I, in no way, intended to suggest that FICO scores on a curve or has ever-changing standards.
Fair enough, but I think it's more accurate to say that when you get put into a new bucket, you're compared to new standards, not new people. Regardless of who else is in the bucket, or if 100 people are in the bucket with you or 1 million, your score will be exactly the same.
But I have a tendency to be pedantic, so I'm sure the way you said it is fine, too.
^^ I see your point and can agree with that.