Suze said....

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

I just heard Suze say that paying an old collection that's been on your reports for say, five years, won't help your FICO score because by the time it's that old, it's not really hurting you that much.

Then she went on to say, however, that you would help your FICO score if you were to pay a collection that's very recent, like 3 months old, for example.

No comment.

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Well...shes kinda right, I think she missed one important nugget of information. DOLA! If I had a collection that was 5 years old and last reported 4 years ago, I wouldnt touch it either. All that would do is drop my score once i pay it off, since they will now report the account paid in 2008 which in turn makes that account late as of last month... And in the long term paying a collection that is 3 months old would help your score in the long run, cause your still taking a big hit because that collection is brand new. Paying it off will only assist you to distance yourself away from it now.

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Now that's an interesting take on it.  If that's what she meant, it certainly wasn't clear from her comments.

I probably should have explained the context of her comments in my original post.  She was responding to an email from a viewer who had said she had several medical collections from long ago that she had just learned about, and she had just learned that her FICO score was 554.  The viewer then asked Suze whether paying those old "medical bills" (as she put it) would make her FICO score go up.

Suze said no, paying collections that old won't make your FICO score go up, but if they were only three months old, for example, then yes, it would make your score go up.

If I were completely ignorant about the way FICO works, my take-away from that advice would have been that paying a three-month old collection would make my FICO score go up as soon as it's paid.  Granted, she didn't explicitly say that, but that was clearly the message that was conveyed.

Incidentally, I actually like Suze for the most part.  I like the fact that she rides people with the question, "How are you going to pay for this?"  If more people would ask themselves that question before they buy stuff they can't afford, many of them wouldn't get into so much trouble.

Note that this is different from the DR philosophy of not buying anything at all on credit.  For Suze, it seems to me that credit is a tool that can be used wisely, as long as you can afford what you are buying.  I buy that.

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Well as we all know Suze is no FICO expert. Actually I dont think she really understood FICO scoring until her kit was created. So all she knows about FICO is from third party information she received from Fair Isaac. Information she consistantly buggles up or misinterprets.

[haulingthescoreup]

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@fused wrote:

What if I have large yellow teeth...might you be interested then

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Well, I suppose if you are a horse that stands 16 hands and has been broken to English bit and bridle, and has some experience in cross-country hunting, we might talk! (You'll need to like smelly, baying hound dogs and hunters' horns blasting suddenly in your long, hairy ears.)

I'm willing to take a 4-foot fence or hedge, but I have a 3-foot limit on stone walls.



edit to add: TJ over, at least by the mods (sorry, sorry)

Message Edited by haulingthescoreup on 07-13-2008 01:37 PM

[NikJ4]

ok,,,back to the subject at hand and not Suzi's teeth....

If I have collections starting in 2007 and going back to 2004, do I pay them or do I leave them alone. If I am paying, would i only pay IF they are going to delete? What is the true stategy with the collections and/or charge off's? If the creditor will not delete, then do I just let the time roll for 7 yrs or what?

[Anonymous]

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@NikJ4 wrote:

ok,,,back to the subject at hand and not Suzi's teeth....

If I have collections starting in 2007 and going back to 2004, do I pay them or do I leave them alone. If I am paying, would i only pay IF they are going to delete? What is the true stategy with the collections and/or charge off's? If the creditor will not delete, then do I just let the time roll for 7 yrs or what?

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Well, to me the best answer would be for you to pay it off. If they do delete it, well good for you. If not, then at least you now have a "fresh start" and can start building positive history from the last time you were delinquent. Ignoring it and letting time roll could just give a current 120+ day delinquency every single month till it eventually falls off. Plus the CA can sell your account to a different CA thus causing you to have a brand new collection trade line in your credit report.

[Anonymous]

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@Anonymous wrote:

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@NikJ4 wrote:

ok,,,back to the subject at hand and not Suzi's teeth....

If I have collections starting in 2007 and going back to 2004, do I pay them or do I leave them alone. If I am paying, would i only pay IF they are going to delete? What is the true stategy with the collections and/or charge off's? If the creditor will not delete, then do I just let the time roll for 7 yrs or what?

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Well, to me the best answer would be for you to pay it off. If they do delete it, well good for you. If not, then at least you now have a "fresh start" and can start building positive history from the last time you were delinquent. Ignoring it and letting time roll could just give a current 120+ day delinquency every single month till it eventually falls off. Plus the CA can sell your account to a different CA thus causing you to have a brand new collection trade line in your credit report.

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You won't get a current 120+ delinquency if the collection is listed as a third-party rather than a tradeline.  In that case, it is scored from the date assigned (or open date).  You can get dinged every month if the collection is reporting on a tradeline, however.

Paying a collection will not improve your score in the short-term, and may only improve your score in the longterm if the collection is on the tradeline rather than an actual CA account.  In the latter case, paying those collections will never help your score.

Even though it won't help your score, there are still some reasons to pay a collection.

1) If you don't pay it, you may be sued.  A judgment on your reports would look much worse than a collection.

2) It looks cleaner on manual review.

3) Some lenders will require that collections be paid as a condition of receiving a loan.  Mortgage lenders, in particular, often impose this requirement.

4) Assuming the debt is valid and you actually owe it, it's the right thing to do.

If you do decide to pay it, however, make sure you try as hard as you can to get a PFD first, since that is the only way to pay a collection and improve your score (once it's deleted).

Message Edited by cheddar on 07-13-2008 02:09 PM

[Anonymous]

I have to agree. Sometimes, I don't think Suze says the right things that would really help the person out.

HOWEVER, I have to disagree as well. If it wasn't for Suze's "young fabulous and broke" or whatever it is I wouldn't have known anything about Fico scoring and that using 99% of your available credit is not good I found out about this site thanks to her. So I will give her a little credit.

-I do like how she rides people when they ask if they can afford it. Some people's requests are too funny. "I make 1600/month, no savings, 3K in cc debt, a car loan @ 20%... Can I afford a new horse that's going to cost 3K and then 600/month to feed/board it?" HAHA.. that's not exactly the callers correct income and debt but he did ask for that horse. You get the picture...Some people just don't think. YOU ARE DENIED!

[marty56]

Anyone else think she's is hot when she says DENIED.  I get the urge to call up and say I've been a bad boy with my Visa card at Best Buy today.

[cam006]

slowly backing out of the room and closing the door behind me