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How much does it help your credit score if you pay off a collection agency and have it removed and or deleted ???
@Anonymous wrote:How much does it help your credit score if you pay off a collection agency and have it removed and or deleted ???
It varies, depending on what else is in your file.
Every profile is different.
To piggyback on SouthJ's excellent reply, here are two concrete examples:
* Suppose you have five unpaid collections, and each one is for < $100. You could pay all of them and get them removed as well, and it would not help your FICO 8 score at all. That's because FICO 8 ignores all collections for less than $100, even if they are unpaid. But that same strategy would help your mortgage scores, which use old models.
* Suppose you have nine old unpaid collections (each for more than $100). You pay off one and get it removed. That will probably not help your score at all. That's because you still have eight collections. All FICO models probably group the number of collections, so that once you have enough of them, having one more may not make it worse.
What can be meaningfully said is that:
* Getting ALL of your collections removed will likely help you.
* Getting all of your serious derogs removed will help you even more (anything different from a Day 30 Late).
* Getting all of your derogs removed will help you a huge amount.