need scoring help

[Anonymous]

I close on my first house on 8/31/18, and I have 2 accounts in collections (medicals). I have tried and tried, but they will not accept a pay for deletion. My question is, if I pay it and ask them to report it to the bureaus would my score go up or down?

thanks

[ChessChik47]

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@Anonymous wrote:

I close on my first house on 8/31/18, and I have 2 accounts in collections (medicals). I have tried and tried, but they will not accept a pay for deletion. My question is, if I pay it and ask them to report it to the bureaus would my score go up or down?

thanks

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Hi OP!  Congrats on the new home!  Paying the debt is always better than not, IMHO.  Your score may not change right away, but getting rid of the negatives is better for your score in the long run.

[rbentley]

As each situation and credit report is so different and individual, no one can give you an authoritative response.  A paid collection is looked upon much more favorable that an unpaid one.  I would generally expect a score increase, but how much would depend on a lot of other possible factors.

[Anonymous]

If these are your only 2 major negative items, having both removed would typically result in a 60-80 point gain or so.  If you only have 1 removed or you have other major negative items present (like a 90+ day late) you'd stand to see little or no scoring gain at all.

[rbentley]

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@Anonymous wrote:

If these are your only 2 major negative items, having both removed would typically result in a 60-80 point gain or so.  If you only have 1 removed or you have other major negative items present (like a 90+ day late) you'd stand to see little or no scoring gain at all.

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As I understand the OP's question he/she is asking for what the scoring effect will be of paying the charge, but it remaining on his/her reports, albeit with a now closed/paid status.  Apparently, numerous attempts to obtain PFD have not been successful.  Of course, after paying they may be ameniable to a GW removal and that would absolutely result in a score increase.  However, if they are adamently opposed to a PFD they are likely to be reluctant to do a GW deletion.  As these are medical collections they would likely not affect FICO 9 scoring, but I dont know how medical debt is calculated on FICO mortgage scores.

[Anonymous]

Thanks everyone. I guess I'm more worried about them decreasing my score than anything, especially since I'm this close to closing.

[rbentley]

I do not see it as at all likely that your score would decrease at all from paying the accounts.  If that is your primary concern, then you should feel confident that paying them off is the best course.  Have you asked your LO about this?  I would expect that they would recomend/request that you do so.

[Anonymous]

I did and they said to pay it, even though they didn't sound so sure if my score would increase or drop.

Well I just paid it, now I'm about to send the receipt to the collections company so they can report it. Shouldn't I also send it to the bureaus myself?

[Anonymous]

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@rbentleyOf course, after paying they may be ameniable to a GW removal and that would absolutely result in a score increase. 

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Not necessarily, as the OP has not yet answered the question as to whether or not there are any other major negative items on their CR.  If there's a 90-day late payment from 6 years ago (for example) even if the 2 collections were removed via GW there would likely be little to no scoring gain. 

[RobertEG]

The debt remains delinquent until it is paid.  Longer periods of delinquency, either on an OC account, such as updating from 90 to 120-late, or on a collection, showing that the period of delinquency since initial date of delinquency has extended, affects scoring.

When you pay a currently delinquent collection, the debt collector is then required to update their reporting to show paid.

That reporting both terminates the delinquency status and effectively extends the stated period of delinquency from first delinquency up to the date of updated reporting that terminates delinquency status.

However, the extent depends upon how long ago the collection was updated.

If the debt collector has been making regular updates showing continued delinquency status, the effect may be minimal.

However, if the collection has not been updated for years, the effect may be substantial.

Once the collection is updated to show paid, closed, $0 balance, no further updates will extend the delinquency period, as it is no longer a delinquent debt.  Thus, paying will end any increasing scoring effect of the collection that might be made, as any update will not extend the delinquency period.