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Paid Collections and FICO score movement


Paid Collections and FICO score movement

I'm hovering at just over 620 on my current scores.


I recently paid off 3 collections this week, with dates placed for collection (according to TransUnion) of:

 - 3/2008

 - 10/2007 

 - 4/2006


I also paid a 4th one that, for whatever reason, isn't and has never reported (I know, I probably shouldn't have, but what's done is done)


I also have about 6 more collections, but those were all opened more than 4 years ago, so I'm assuming I shouldn't touch those at all right now.


Here's my question,  if all of the collections are reported this month, but with "paid $0 balance", how big a score drop am I probably looking at?  How long would it probably be before I can get my middle score back about 620 so I can consider mortgages again?


I'm realistic that my scores will probably drop below 620 and put me out of the running for mortgages, however, I'd like to know when I can maybe consider being about 620 again, 6 months?  1 year?  2years?  I would guess (hopefully) not more than 2 years? 

Message 1 of 3
Regular Contributor

Re: Paid Collections and FICO score movement

I don't know how much of a score drop you can anticipate, but if you are looking to purchase a house you are going to want a mid score of 640 especially if you won't be purchasing before the end of the year.  I met with my mortgage broker yesterday and I'm applying in December and he said that I would need a mid 640 just to be safe.  A lot of bank are changing from 620 to 640.

Message 2 of 3
Established Contributor

Re: Paid Collections and FICO score movement

Since you have paid the collection accounts off with out I am assuming a PFD, you should think about dending good will letters to request deletion of the lines from your reports.  With the other collections, please think about PFDs.


Its not realistic to pull your scores up very quickly, again depending on how you work with the collections.


Good Luck

Starting Score: TU:537
Current Score: TU:683 (3/11/10)
Goal Score: TU:740

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Message 3 of 3