Collection Payment and DOFD

[Anonymous]

Will paying a collection account drop my score?  Does it re-start one's  date of removal?  I have several accounts from 2007 that I am interested in paying offf but I am scared it will hurt my score.  I am hoping to buy a home soon and I don't think I can settle with open collections but I am scared my scores will drop so low from paying them off that my loan won't go through either.

[MarineVietVet]

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@plewis80 wrote:

Will paying a collection account drop my score?  Does it re-start one's  date of removal?  I have several accounts from 2007 that I am interested in paying offf but I am scared it will hurt my score.  I am hoping to buy a home soon and I don't think I can settle with open collections but I am scared my scores will drop so low from paying them off that my loan won't go through either.

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Paying a collection will neither raise nor lower your score and paying it will not restart the drop off date. The CRTP (Credit Reporting Time Period) is set by federal law and can't be changed by anyone. A collection can report for up to 7.5 years from the DoFD (Date of First Delinquency) on the OC account that led to the collection.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

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

[Anonymous]

Paying an old collection could impact your score.  It would be updated to the date paid and look like a current collection.

[randaljon]

I thought FICO changed this in the past year, no longer will paying a collection make it current and lower score. Did I hear wrong???

[Anonymous]

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@randallcred wrote:

I thought FICO changed this in the past year, no longer will paying a collection make it current and lower score. Did I hear wrong???

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If you heard it I would bet its true.    I haven't been around for awhile and am not aware of all the newer changes. 

Sorry, didn't mean to scare anyone.

[MarineVietVet]

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@Anonymous wrote:

Paying an old collection could impact your score.  It would be updated to the date paid and look like a current collection.

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I used to think that also but this doesn't apply to collections. I have been guilty in the past of spreading this in error. Since HTSU explains things MUCH better than I can I will C&P this from one of her posts:

Collections are scored off the date of assignment, not the DOLA. A change in DOLA shouldn't affect the score. .

This is such a common belief that we're trying to find examples with before-and-after reports where it happened, in order to see what's going on. If either the CA or the CRA is handling the data incorrectly, it needs to be corrected.

Here's a thread discussing this: Settle or Pay in Full?

Again, I'm not saying that it doesn't happen, but it's not supposed to, if the CA is reporting correctly and if the CRA is putting the info into the correct data fields.

 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".