If I have all of the Collections removed....

[rkp25]

I have 4 medical collections accounts on my credit reports, if i pay them all off and get them removed, how much of an increase might I expect?

The totals of each are $336, $280, $58 & $220. 

My current TU is 655

and EQ is 649

Thanks, shooting for a home purchase this year!

[Shogun]

It all depends on what's left on your CR.  Do you have any more baddies?  What positive TLs do you have.  What is your AAoA?  This all factors in.   But on a good note, removal of those baddies will make for a cleaner CR and I'm a big fan of that.

[rkp25]

my TU report reads like this under accounts, plus the 4 medical collections I mentioned above (plus the collections are all fairly new, within the past 2 years) :

Company Account number Date opened Balance Status Negative Indicator? [?]  

Chase Na		10/2003	$0	Paid or paying as agreed	No
Bank Of...		10/2005	$0	90 days past due
National ...		10/2004	$0	Paid or paying as agreed	No
Wells F...		11/2003	$0	Paid or paying as agreed	No
Gmac Mort...		11/2001	$0	Paid or paying as agreed	No
Us Dept Of Education		4/2001	$0	Payment after charge off/collection
Chrysler Financial Servi		7/2006	$0	Paid or paying as agreed	No
Carolina Telco Fcu		10/2009	$6,966	Paid or paying as agreed	No

[Shogun]

Would need more specifics on the Bankof... and the student loans to know how long they have left, but after that, you would be clean with the collections gone.

[92235]

I had one unpaid medical collection for $173 on my report fall off. I was at 690 EX and a little over 700 EQ. I checked my EQ about six months after it fell off and it jumped to 757. The week after the collection fell off I applied to AMEX for the BCE. I was approved and they sent me a letter with my EX. It was 790. I was blown away. At the time I had about 4 year history with 4 CCs and low Util.

[rkp25]

The BOA was a home mortgage that we paid off when sold but but there were 90 day lates on there, it should fall off this summer, June 2013. The US Dept of ED was paid off in full too and should fall off this year too. Also, I'm an AU on my spouses bOA cc and for whatever reason it's nit reporting on my TU but is reporting on my EQ and Ex, it carries a balance of $240 with a credit limit of $9k, should I makeassure this get's added to my TU report, will this help?

Thanks, you guys are awesome!

[Anonymous]

Having the collections removed will help boost your scores, but as mentioned it varies depending on other negatives.

Guess the first question to ask is what the reason you are looking to improve your scores? Are you trying to purchase something? Just trying to reach a goal?

[rkp25]

Trying to purchase a home.  I realize that the better my credit, the more options I will have. My goal is to start the loan process in 3 months so want to make sure I have all my ducks in a row. The medical collections were paid yesterday and will hopefully be deleted some time after the 1st. 

[Anonymous]

The first thing I would do is stop talking to collection companies for the moment.

Understand this, paying off collections will not have an major impact on your scores. If the collection is removed that should have a much bigger impact, but many things to consider. How old the account was (the older the account the less impact it has) as an example.

Next thing you need to understand is paying off collections can lead to your application being denied due to updated negative information within the last 12 months.

If you are going to negotiate your collections, negotiate for a PFD. Do not tell them you are trying to buy a house as this will hurt your chances for negotiating.

Many Lenders will not require you to pay older collections, but it is UW discretion and Lender overlay requirements that dictate it. If you are required to pay the collections for approval you can ask if you can pay them at closing. You can still try and negotiate a payment but must have it in writing on what they agree too.

As far as rates go yes you will qualify for a better rate with a Conventional Loan with a higher score, but most other loan programs, score qualification has very little impact on the rates and if they do it is very minimal.