Does a recently disputed and deleted collection improve your credit? If so, how fast?

[Anonymous]

I recently pulled all three credit reports and finally disputed a collection item that had been on my credit for at least 5 years. It was a medical bill for an auto accident that was not my fault and the insurer should have paid. The great news is that all three bureaus removed the negative item.

My fico thru Equifax was 726 as this was the only negative item on my reports. Will this improve my credit? If so, how fast? What type of jump in score should I expect to see if any and should I repull my credit anytime soon?

My wife and I are in the process of buying a home in the next 6-12 months. Thanks for the feedback.

[daisyduke]

Hard to say what kind of an  increase you will see if any. This is your only derog, right? Normally I would think you would get a decent score increase but in this case, that age of the collection being five years old might have actually helped more than it hurt. why? it could have contributed to your Average Age of Accounts. Also now if that was your only derog, you are being scored in a "clean bucket" compared to others with similiar credit profiles- not ones in the dirty bucket, ie that have a derog., a collection, a public record, etc.

I don't know everything about this stuff, so hopefully others will chime in.

So please let us know when you do find out.

[Anonymous]

Thanks for the input! Any others?

[llecs]

As mentioned it depends on MANY different factors. If this was your only major derog (90+ days late, CO, CA, judgment, etc.), and you don't have any other recent lates, then it's reasonable to expect a score bump. There's no way to predict but I've seen some post gains of 20+ points on their EQ or TU FICO score when losing a 7 yr CA due to CRTP.

You can actually lose points when a CA is removed though. AAoA only comes into play if this was an OC, which sounds like it was a CA, so that shouldn't be an issue, but you could be rebucketed as daisyduke pointed out. I lost points when my very last baddie was removed (90 day late) off TU. But rebucketing isn't bad. It just means your FICO is being compared to others who have a great payment history. Just means your score would rebound much quicker and your CR will be cleaner for it.

[RobertEG]

Removal of the CA clearly will have no effect on AAoA, for a CA "account" is not an account with you.

As has been said, a lot depends upon other factors in your CR.  Did it move you to a "clean" credit file, with no other major derogs? Or are you still in a "dirty" bucket due to other major derogs.

Most CAs come about after prior derogatory reporting to the OC account, such as 30/60/90+ lates, or maybe even a CO. before the CA was reported.

Removal of the CA is a totally different "account" and reporting matter that has no impactt on prior OC reporting of derogs.

What else is in your CR in the way of prior derogs?