Collections affect on Mortgage scores...

[Anonymous]

Can anyone give me an idea of the impact (points) a paid collection has on a mortgage credit score? My current info is:

Eq 641

TU 552 (they hate me)

Ex 599

Pretty early on in rebuild (32 months).

I have two collection accounts that are showing a $6700 balance, but they will be paid off this week and will hopefully be off the report by month end.    

I have 5 accounts that were 120+ late and will be settled with 0 balance by the end of the week. 

2 hard inquires- both less than 12 mo (one a prequal for a mortage)

5 y 10 m AAoC

2 CC in good standing with $0 balance ($2500 CL)

I have an existing mortgage that is 7 yo and has always been in good standing. My current DTI is 20%

Is there a chance that my score will increase enough to meet at 620ish median? (I know COVID is pushing the CS needed into the 660 but I DON'T see that happening this year...

Thanks for any info- 

Nik 

[Anonymous]

Hey how did this work out for you? I'm kinda in the same boat

[newmomnewme]

I had two Unpaid collections on my report and my scores did not improve after I paid them. It is my understanding that I won't see any score improvement until both are no longer on my report. 

I think the point difference (if any) depends on the rest of your profile. Can you work out a pay for delete deal? 

Is there anything else you can work on? Utilization, # of accounts with balances, etc. 

[Anonymous]

I have one collection that has agreed a pfd but i also have about 4 cards that have been charged off that i will be paying off

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@newmomnewme wrote:

I had two Unpaid collections on my report and my scores did not improve after I paid them. It is my understanding that I won't see any score improvement until both are no longer on my report. 

I think the point difference (if any) depends on the rest of your profile. Can you work out a pay for delete deal? 

Is there anything else you can work on? Utilization, # of accounts with balances, etc. 

---

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@newmomnewme wrote:

I had two Unpaid collections on my report and my scores did not improve after I paid them. It is my understanding that I won't see any score improvement until both are no longer on my report. 

I think the point difference (if any) depends on the rest of your profile. Can you work out a pay for delete deal? 

Is there anything else you can work on? Utilization, # of accounts with balances, etc. 

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[newmomnewme]

Good @Anonymous  Most important is to get all of the derogatory accounts removed vs just paid. You've got the one pfd agreement for the CA, so if you can get the 4 CO paid and removed then you would be in a really good spot! 

Even when you have just one derogatory item, it hurts the same as having multiple. 

[Anonymous]

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@Anonymous wrote:

I have one collection that has agreed a pfd but i also have about 4 cards that have been charged off that i will be paying off

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@newmomnewme wrote:

I had two Unpaid collections on my report and my scores did not improve after I paid them. It is my understanding that I won't see any score improvement until both are no longer on my report. 

I think the point difference (if any) depends on the rest of your profile. Can you work out a pay for delete deal? 

Is there anything else you can work on? Utilization, # of accounts with balances, etc. 

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@newmomnewme wrote:

I had two Unpaid collections on my report and my scores did not improve after I paid them. It is my understanding that I won't see any score improvement until both are no longer on my report. 

I think the point difference (if any) depends on the rest of your profile. Can you work out a pay for delete deal? 

Is there anything else you can work on? Utilization, # of accounts with balances, etc. 

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If that is your only CA (COs aside), you will definitely see a score boost from it's removal. CAs and COs are seperate. Biggest score boost when you have CAs is when the last CA comes off.

You will be very unlikely to get PFD on COs. OCs just do not do it, but it never hurts to try, you might get lucky so it is always worth a shot. Best bet is to get a GW removal after paying the off/settling.

Paying down/off COs that have a balance will also help your scores as the balance(s) go down. This is a major difference between COs and CAs. When you get all COs to $0, that will be the best it can get until they get removed (via aging off or GW request), but you should hopefully see score gains from paying them down.

Again, paying CAs does not help your scores, the removal of all of them is what helps. For getting a mortgage, if you cannot get PFD, they will likely at least want them paid, even if it does not help your scores. Double edged sword there.

Good luck!

[Anonymous]

And whether or not you will see score improvement/loss for paying COs depends on whether they were regularly updating and if not how long ago last update was.