No,it will go even lower,once its been recorded the damage is done.You have to wait the 7 years.
The answer below is incorrect. Here is the correct information:There are three scores reported on the GRE® General Test:a Verbal Reasoning score reported on a 200 - 800 score scale, in 10-point incrementsa Quantitative Reasoning score reported on a 200 - 800 score scale, in 10-point incrementsan Analytical Writing score reported on a 0 - 6 score scale, in half-point increments1400+
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.
The answer to this type of question depends on SO many factors. Paying off collection accounts will not necessarily raise your credit score, which is what most consumers believe. The variable is the date the accounts were last reported (or updated) on your credit report. The date last reported, or "status" date is the date that causes collections and charge offs to impact your credit score. Anything, including legal items, late payments and collections/charge offs, updated within the last 12 month time frame, falls into the "history" category. This category accounts for 35% of your credit score. So, if you have old collection accounts which have not been updated recently; paying them off will cause them to be a paid collection as of, well, NOW. If, on the other hand, your collection accounts ARE being updated to within the last 12 months (regardless of the last time you used the account), then paying them off will probably not cause deductions to your score and MAY raise it. Certainly, 12 months from now, any collection account that is paid is better than an unpaid collection. The best scenario is to offer creditors a pay-for-delete. THAT would benefit both you and those whom you owe.
Paying off collection accounts in no way improves your credit and may, under certain circumstances, HARM it by lowering your scores. Once an account goes into default, it is a derogatory mark against your credit. The derogatory nature, PLUS the "date last reported" combine to cause deductions to the score, even if the account has been paid off. If the date last reported falls within the past 12 months, the deduction can be huge. In the simpliest terms, a credit report is a history of how you have managed debt in the past. So, obviously, the recent past (last 12 months) has the most impact on your scores. Any derogatory mark falling within that time frame is a "score killer". This is the reason that paying off old collection accounts don't help your credit. They often cause the account to (confusingly) appear to be more recent. The only true way to improve your credit is to pay a collection account in exchange for its' REMOVAL from your credit. Unfortunately, this is not easily accomplished. However it is still worth the effort because that is the only way to actually improve your credit by paying defaulted debts.
Yes Once a collection account is reported to your credit history, its origin no longer matters. If money is owed and it gets listed with a credit reporting agency as a collection account, it affects the main factor in your credit score: Payment history. See www.myfico.com/CreditEducation/WhatsInYourScore.aspx for details of a FICO score.
Paying off collection and charged off accounts does not necessarily raise your credit score. Credit scores are calculated on ALL the information in your credit report. 35% is based on payment history and this is where you may take a hit when you pay off a collection account. Example: You have a credit card collection that was last used in 2000 and has not been updated on the bureaus since 2001. Because the UPDATE (the date it was last reported) is over 12 months old, it impacts your credit score less and less. Paying that collection account causes you to have a (now) paid collection as of 09/04, making it fall within that important 12 month time-frame. You might actually take a deduction in this case. Once again, it depends on ALL of the information showing. If your collection accounts had current reporting dates, then paying them off definitely improved your score. Regardless of which scenario is true for you; your score will ultimately be much better. 12 months from now your score will be higher having old, paid collection account than having old, unpaid ones.
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.
Not always. Paying a collection refreshes the date of last activity. The FICO algorithm considers the last 6 months of activity to be the most important which means that it has the most impact on a credit score. Paying an old collection puts that collection back within that 6 month period and lowers your credit score on many occasions. The rule of thumb is Pay collections which are active within the last 6 months and do not pay collections which have been inactive for over 2 years. Use your best judgement for everything in between.
Any collection account on your credit report is considered a derogatory listing regardless of status (unpaid, paid or settled). All accounts of this type have a negative impact on your score depending on when they are last reported/updated. Since settlement is paying less than the full amount due, this is obviously seen as less favorable than paying in full. But, once again, it is the date last reported that impacts the score.
There is no starting credit score. The FICO credit score ranges from 300 to 850, but if someone doesn't have any credit at all, the score will be reported as N/A. According to the Fair Isaac Company (FICO) you need 6 months of account information in order to get a FICO credit score. The score itself will be determined based on several factors such as your utilization rate, type of account, payment history, inquiries, etc....
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