Paying off a Charge Off or Collection Account

[sjt]

I have been told that if you pay off a chrged off or collection account it could initially have a negative impact on your score because it changes the date of last activity to a more recent date. I have also been told that FICO was going to fix this and it would be reflected in there newer scoring models.

Can anyone confirm this.

Thanks!

[llecs]

Yes on a potential impact, but certainly not always. The DOLA could change (not always) but the status or reported date could change. YMMV on the CRA and associated FICO version's read on that change.

I haven't heard about any FICO fix. I don't know if there's anything to fix. If a creditor adds a late in the month a debt is paid or update a date or status making the collection appear newer when it certainly is, then I don't see a fix. That's an issue with the creditor.