Closing lots of collections accounts does this increase or decrease score

[Anonymous]

In all the information on credit scores I have read it states that if you close a whole bunch of things down it could negatively affect your credit score.  However, what if someone wants to payoff multiple collection accounts?  Will that increase or decrease your credit score?  How long does it take to show this increase once they are paid-  THANK YOU!

[XAVIERSMAMA]

Depending on how old your collections are, paying them off will probably decrease your score because it will cause them to appear as more recent in your FICO scoring.  If you want to increase scores when dealing with CA you need to do PFD.

[Anonymous]

What does PFD and CA mean? 

[MarineVietVet]

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@Anonymous wrote:
What does PFD and CA mean? 

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Welcome to the forums.

PFD= Pay for Delete

CA= Collection Agency

 (myfico)
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

CC interest free as of 8/09
Time can heal all wounds and a low FICO.
"Hello my name is Sandy and I'm a recovering crediholic".

[RobertEG]

Technically, a CA is not an account of yours, it is an account between the CA and the CRA that then posts to your CR. What you do is pay them off, which will lead the CA to then report that their account is paid in full.  CAs, paid or unpaid, remain in your CR and are still scored by FICO for  7 1/2 years from the date of first default (DOFD) on the orignal creditor account that led up to the posting of the CA.  That will be the 30-day late that preceded the CA reporting.

The only way to get a CA off earlier is to either secure an agreement with the CA, prior to paying, that payment will result in their deletion of the account (PFD offer), or to pay, an then request a good will deletion (GW) after paying.  The problem with either of these is that they are solely at the whim of the CA, and many have a set policy that they accept neither.

The primary benefit of paying a CA is to forstall subsequent legal action against you.  To evlauate your peril on this front, you need to know the statute of limitations for your state.

[Anonymous]

i paid 6 medical collections off during several months in 2009, the have dofd of 2004.2005.2006. they were updated to paid as late as august this year.  i saw no score drop or gain from paying them.

 i do plan to send gw letters around the 1st of the year, explaining with proof the months of work i missed over the last several years which made me default on paying off the uncovered amounts that were turned over to collection.

i know that the 7.5 years applies to collections, but i was told from a friend who works at a collection agency, that they changed their reporting policy to 6 years. i assume thats just their new policy and not a new law.