CREDIT -- Does paying off accounts in collections help credit score?

Does paying charged off or collection accounts actually improve ones credit score?

CREDIT -- Does paying off accounts in collections help credit score?

Ok NO offense but there%26#039;s some information here that is in my opinion misleading. Tyba has asked, %26quot;Does PAYING OFF accounts in collections HELP credit score?

Does PAYING charged OFF or collection accounts actually IMPROVE ones credit SCORE?%26quot; Note the clue words I put in caps. The answer to this specific question is NO.

Paying off collection accounts can have a negative impact when effecting scores. When an account is %26quot;updated%26quot; that you have paid it:

1.you risk the account being reaged. Now they may keep it on your report longer after payment than what it would have been orginally IF you allow it.

2. You lost whatever age (the older the collection on your report the less effect it has on your score)it has already accumulated

You have a moral obligation to pay accounts you owe. However, how do you know you have a contactual and legal obligation to pay these collectors? You need to send them a debt validation letter by certified mail return receipt requested. You want them to prove to you that you owe them and not the orginal creditor.

Look at this way.....You owe your friend let%26#039;s say $100.00. You don%26#039;t pay her. Some time goes by until one day I call you and say I%26#039;m calling to collect your debt with your friend. Now the amount may have changed to let%26#039;s say $250.00 (this includes original amount plus some fees and interest). PAY UP. You know you owe your friend the money but you wouldn%26#039;t want to pay me right.....why? your credit report says you have to pay me now not the friend. Would you pay me without questioning that? If you answered yes then Hey Tyba you owe me $250.00...j/k

On the other hand...For manual review of your credit with a creditor it will look favorable for you if the accounts were paid if they in fact were your debts and you had a contractual and legal obligatin to pay them; but, will not effect scoring unless the lender uses their own internal scoring method.

CREDIT -- Does paying off accounts in collections help credit score?

of course

CREDIT -- Does paying off accounts in collections help credit score?

It will help you score alot and is a wise decsion to do.

CREDIT -- Does paying off accounts in collections help credit score?

Yes it does, also to boost your FICA score you want to have as much credit available to you, but using very little of it. Paying off your 4th credit card and then cancelling the account is good, but not as good as simply paying it off and keeping the available credit line open.

CREDIT -- Does paying off accounts in collections help credit score?

It most certainly does... your credit score measures your credibility, so think of it this way: ANYTHING you do that proves that you%26#039;re credible (paying your bills on time, paying off late bills or collections, etc) increases your credit score. Anything you do that disproves your credibility (late payments, defaults, collections, etc), decreases your credit score.

A past collection or charged off account is exactly that... something that happened in the past, and how rapidly your credit score rises is partially determined by how you handle new credit, and partially by how you%26#039;ve made amends on your previous credit.

CREDIT -- Does paying off accounts in collections help credit score?

I disagree with Emjay%26#039;s answer.

First, she says that making a payment on your debt %26quot;restarts%26quot; the clock on reporting. I have stated that according to the Fair Credit Reportin Act, it clearly states that the reporting date begins on the day of default, and there is NOTHING that says the date can be restarted, unless the original default amount was paid and a new debt has occured (FTC Opinion papers). So unless she can supply me with a source for this information, please ignore that advice.

Paying off a debt will NOT help your credit score UNLESS that negative report has been removed from your history. If the creditor tells you they can%26#039;t remove it, they are lying!

Credit reporting agencies only report what is sent to them by creditors. The creditor can simply inform the agency that they bill is paid, with no negative comments, or they can remove it completely.

But unless you get them to PROMISE IN WRITING, before you pay them anything, they will not do it!

Do NOT pay them a dime until they agree to fix your credit histor. Otherwise, what is the point of paying them? You will now be broke, PLUS you will have a bad history.