Student Loan Collection Account Balance, does it affect my score?

[Anonymous]

So, the only negatives I have left on my EQ report are 2 collection accounts from old student loans. ($729 and $1120 balances) I know these have a negative impact on my score and I plan on paying them off as soon as I am able. My question is: Does the actual balance impact my score? Would i expect any type of increase if these were shown as paid off? I have heard that the dollar amount doesn't matter per se, but I also think this is counting towards my total credit usage. This is only with Equifax as there are no negatives on my TU or EX.

Since I plan to apply for a mortgage at the end of the year (if things pan out) I would make a point to pay them off quicker. If they don't have much of an impact, I would prefer to wait 2 months or so.

[RobertEG]

Once a derog has been reported, it contnues to be included in scoring under payment history even if the debt is paid.

No, paying wont in and of itself improve your score, and the amount is not a factor.

However, consideration of a consumer for new credit, particularly if the amount of credit is substantial, often involves consideration of more than just a three-digit credit score.  The continued showing that a delinquent debt remains unpaid is never a favorable factor in a determination of whehter to extend credit to a consumer.

[Anonymous]

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@RobertEG wrote:

Once a derog has been reported, it contnues to be included in scoring under payment history even if the debt is paid.

No, paying wont in and of itself improve your score, and the amount is not a factor.

However, consideration of a consumer for new credit, particularly if the amount of credit is substantial, often involves consideration of more than just a three-digit credit score.  The continued showing that a delinquent debt remains unpaid is never a favorable factor in a determination of whehter to extend credit to a consumer.

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That's what I figured. I fully intend to pay it off 6 months or so before I start looking for any more credit. At the very least, I hope it will look a bit better showing that I paid it off since it'll be there anyways. 

[takeshi74]

You'll want to aim for removal -- especially if you're planning on a mortgage.  Don't overlook the Rebuilding subforum.  Sometimes you have more leveage to negotaite a PFD if you have not paid.

[Anonymous]

I will explore that option when I ask for a settlement. With these balances, I would gladly PIF if it meant deletion. I just need to wait until I can cover the entire thing all at once and be done with it.

edit: I have not rec'd my Fed return yet and I assume it is going towards this debt. That will drop if $600 or so. I will wait for that to hit and then pay off the balance and see what they'll do.