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If you pay collection account debts now that are 3-4 years old will that improve your FICO score?

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Wiki User
2007-04-28 12:37:59
2007-04-28 12:37:59

This is from myFico.com ;-) The presence of a collection is a powerful predictor of future payment risk. If this is valid, paying off the collection will not remove it from your credit report. The fact that it occurred is still predictive of future payment risk and will be considered by your FICO score. However, as this item ages and falls off of your credit report, its impact on your score will gradually decrease. Most collections stay on your report for no more than seven years. Most changes to a collection, such as a change to the collection's company, account number, balance, or status, have No Effect on the FICO score. A FICO score could be affected if the "Date Assigned" for the collection is revised. The more recent the "Date Assigned," the greater the negative effect the collection has on the FICO score. ______________________________________________________________ & Just *imho* I do not recommend Not paying it only because it will not raise your Fico. Because I would think the fact that it shows up as Paid (or making payments) would have at least some impact on a creditors view of you as how high of a risk you are or not.

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Related Questions

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How much will removal of incorrect collection account increase fico score?

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== == Collection account are 20% of the total credit score module.

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There are several ways to increase your credit score. The most direct approach is to pay off your debts.

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The amount of a collection account is not what impacts a consumer's credit score. The impact comes from when the account is updated/last reported on the bureaus. The reason is that 35% of the score is factored from "History", meaning what has taken place in the past. (In the simplest terms, your credit report is a history of how you have managed debts in the past.) There is specific emphasis on items dated in the last 12 months. So, any derogatory item (even an old collection account) that is updated to within the past year will have a huge affect on your score. It also does not matter whether a collection account is paid. A paid or settled derogatory item is still a derogatory and will cause deductions to your score for the 7 years it is allowed by law to appear on your credit. If the account does not get updated, its' impact will lessen as it ages. If, on the other hand, the collection agency keeps it updated, it can impact your credit score for a full 7 years.

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When I had a collection deleted from my credit it made my score go up. It will take several weeks.

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The best way to improve your credit score is to have some credit and pay it off regularly. You can also pay off any bad or old debts. It is important to keep checking if your credit score is accurate.

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It will, as long as the collection's date of last activity is within the last 6 months. Paying a collection resets the date of last activity and may wind up hurting your credit score. It is better to have an old collection with a balance than a new collection without a balance.

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A debt consolidation does absolutely nothing to improve your credit score. Consolidating debt causes you to simply borrow more money to pay off old debts.

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time---accounts improve your score for up to 40 years with the same account open----the highest is 850 so not much room for improvement there.

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Not by much. It's more important to your score to pay it in a timely manner.

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No. The only way to improve a credit score is by paying contracts (debts) as agreed, keeping the credit to debt to income ratio at acceptable levels, and so forth.

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A collection can drop your score dramatically and may make it impossible to get a new loan. It is important to take care of the collection account since it will be removed from your credit report seven years after it is paid, but can stay on indefinitely if not.

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While there's no definitive answer with respect to how many points your credit score may drop after a collection, a collection account is a clear indication that a loan, credit card or retail card was not repaid and payment history is one major contributing factor to your credit score. This can have a negative impact on your credit score.

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It will raise your score slightly. If you don't settle a delinquent account, the verbage on your credit report may read: "collection account", or "unpaid collection account". However, if you settle, the report may read "settled". By settling with the debt collector, you have made an attempt to fulfill your financial obligation. Therefore, your score will raise slightly.

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it does not actually improve the score but if they are already turned over to the collection agency - it will just make credit score get worse and worse. the only way to improve score is by paying everything off ON TIME and letting time take it's course. Most bad stuff will drop off within 10 years

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The best way to improve your credit score is to pay off any outstanding debts you may have. You can find out more ways to improve your credit rating you can visit http://www.aaaprocreditsolutions.com/adwords/?gclid=COv177G7_KkCFQFN4AodU28vVQ

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No, a checking account is not correlated to your credit score. The only reason why you have to give your social security # is to prove that you have no outstanding debt with any other banks. ______________________________________ Actually, there is a correlation. Having a checking account doesn't improve your credit score, but you can be accepted or denied an account based on it. If you have bad credit, or no credit, you may be denied from a variety of bank checking accounts. I was told by my lawyer it does improve your credit if you keep your checking account in good standings he said the bank report it monthly to the crdit bureaus thats just what i was told

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You have to have a open active account in order to get a credit score increase.

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The best pay to improve your credit score is to use your credit card (reasonably), and make your payments every time, on time. Paying for debts such as a loan, car payment, mortgage, and so forth will also improve your credit score. In most cases, the score goes up one point for every on-time payment.

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Yes, because by doing that you are converting a Negative on your credit history to a Positive action. Those who look at a credit report are looking to see if you are making efforts to "turn things around." Paying a collection does NOT improve your credit and may, under certain circumstances, cause even more deductions to your credit score. This is one of the fallacies about credit. The factor that causes the largest amount of deductions to scores is when a derogatory account was last reported to the bureaus, not the amount owed or the status (paid or unpaid). A paid collection account can be just as damaging as an unpaid collection. The first answer was incorrect. The only thing that will improve your credit rating is to have the collection removed from your credit report. Offer to pay the collection in exchange for a deletion.

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a account where it is only yours and nobody elses only u can take out money from that account a account where it is only yours and nobody elses only u can take out money from that account

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PAY IT. Pay it all off and keep the receipts! If you can't afford to pay then negotiate and most debt collectors will settle for less if you have the money.


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