Should you pay of an active collection for 2500.00 Planning on purchasing a home in 3-4 months Will it increase the score if paid If so how much will my score increase?

Answer 1

WAIT before you pay!!! If you pay it now it will totally affect your credit score. Make the payment escrow during closing. Now if you can negotiate a deletion letter from the collection agency, this is a different story. First try to negotiate with the agency with the deletion letter as the only acceptable agreement. You will not pay without getting this letter. This means that a contract is written up to say that they will delete the negative market off all credit bureaus once payment has been received. This must be signed and dated. If they do not, no problem, you can place the payment in escrow and they will get paid but your current score will be used. Now if the collection is over 24 months, it will not affect your credit score as much so escrow is the best possible solution unless you can get an approved deletion letter.