mzjazzyazz Posted December 2, 2004 Report Share Posted December 2, 2004 does your fico go up or down when you pay off collection debts? I have tried disputing and they verified, and did not want to settle and delete. I want to start looking into a mortgage loan , but Im not sure if I should pay the collections before I apply, or just wait and let the lender tell me what to do. Link to comment Share on other sites More sharing options...
DocPC Posted December 2, 2004 Report Share Posted December 2, 2004 Fair Isaac does not distinguish between a paid or an unpaid collection. Link to comment Share on other sites More sharing options...
terri888 Posted December 2, 2004 Report Share Posted December 2, 2004 Try talking to a mortgage broker BEFORE you apply, you don't want anyone pulling your credit for nothing, show them a recent report and get there advice. The score may not change if you pay the collections, but having recently gone through this, the mortgage underwriter would not consider my application with open collection accounts. They told me they all had to be paid, and I had to have one years "clean" credit before they would consider an application. So in some respects it is better to pay them if you can't get them deleted as there is no point if you cannot get that mortgage. I have been working on my husband's report for 2 years, and I found that once I had been able to remove all the incorrect stuff like duplicates etc, the only thing left was open collection accounts, and we had to make a decision between paying them or waiting for them to drop off. Not being prepared to wait another 3-4 years for that to happen, we just paid them - some we were able to combine and settle (ie medical accounts). I have had success with getting paid collections deleted by just repeatedly disputing them until they give up - I think to get rid of you and allow them to be deleted.Our mortgage got approved yesterday! My husband's scores were only in the mid 500s so we are thrilled.Good luck to you and let us know how things work out! Link to comment Share on other sites More sharing options...
miracle Posted December 2, 2004 Report Share Posted December 2, 2004 Congrats on the Mortgage Terri888!! Link to comment Share on other sites More sharing options...
edubb007 Posted December 3, 2004 Report Share Posted December 3, 2004 Mel...Hmmm.... You've made me think about this one! Now.... The question is if your score would jump. That depends on the DLA. SOME crditors will update this and if negotiated to a lower amount than they mess with the DLA and it will cost you. It just makes it look recent and for a mortgage that's BAD! Now... You said you didn't want to settle and delete! Only one questions comes to mind!WHAT????You always want to try and get the removal unless it's so old it has no effect and it's a positive TL. Maybe you need to look at these as possibly being positive to negotiate a lower settlement and removal as more money for down payment towards home and better rate. Call me silly but I think that would help me get motivated!eITHER WAY GOOD LUCK!If you get a settlement for deletion letter than make sure it has you ACC#, Social#, Full NAme, EXACTLY what the creditor wants to be done to that TL on the CR ad all other pertinant info ot the CRA will not accept.EDUBB Link to comment Share on other sites More sharing options...
breathing_easier Posted December 3, 2004 Report Share Posted December 3, 2004 edubb: I think what Meldisha was saying was that the creditors didn't want to agree to a pay-for-delete. Link to comment Share on other sites More sharing options...
Ahntara Posted December 3, 2004 Report Share Posted December 3, 2004 The DLA is not the date that impact credit scores. The date that causes deductions in the score is the "status" date, or the date last reported. It doesn't matter when the OC went delinquent, what makes paying off collections such a sticky issue is the "history" segment of the credit scoring software.Specifically, what this means is that if you have an old unpaid collection account, DLA=09/2000 and it was last reported on the bureaus in 2002, its impact on your score is much less. If you pay it, it will most likely be updated to a paid collection as of, well, NOW, 12/04. That update causes it to move into the criticial last 12 months and factor heavily as a derogatory (FICO makes no distinction between paid and unpaid CA's) in the "history" segment. This category accounts for 35% of the score. Do the math, people. 35% of 850-900 is about 300 points!THIS is why paying off old collections do not necessarily help your scores and MAY hurt them. This is also why we are so up-in-arms about Experian right now. When you dispute, they update "status" on everything and state that even old stuff was "verified" as of now, thus triggering deductions on any disputed account that is not shiedled from view after their "investigation". Crapstards! Link to comment Share on other sites More sharing options...
ggluvbug Posted December 4, 2004 Report Share Posted December 4, 2004 my hubby and i have been debating this one. he says pay them because we made the debt (since when did he get so moraL???) but i say dispute first them pay.i looked at my report today, and there are several accounts that have been paid that still show open and unpaid. how do i fix that? i guess dipute first then contact the CA???? Link to comment Share on other sites More sharing options...
terri888 Posted December 4, 2004 Report Share Posted December 4, 2004 Yes it is a moral question that only you can answer for yourself. Lots of people end up in situations they never intended to and do there best to put things right, sometimes that is impossible.If you have CAs that are paid, dispute them with the CRAs first, a lot of times especially if they are old they will end up getting deleted simply because they no longer have the records to verify it. Do you have your receipts for proof of payment? If, after disputing them they come back as verified - and showing not paid, forward copies of your proof to the CRAs and that should be the end of it. I have found that after disputing them sometimes they will update them to show paid - that is fine, but keep disputing them after that, on whatever grounds you can come up with, eventually a lot of them will get deleted. I have had a lot of CAs removed that way. KEEP EVERYTHING - keep all the paper trail, every piece, because if things magically reappear you can find your piece of paper proving it was previously deleted and resubmit that to the CRAs and they will have to remove it permanently.If you have unpaid CAs try negotiating with the CA prior to payment for deletion upon payment. A lot of the time you can settle a debt for less than it was and get it deleted that way - that satisifies all the moral angles - and gets it off your CR which is the most important thing! Remember that a CA only gets paid when he gets payment from you, so after you have paid that account, you have very little to negotiate with in regards to getting the account deleted, they simply don't care about you any more and move on to the next poor individual. GET IT IN WRITING - before you pay a darn cent.Good luck Link to comment Share on other sites More sharing options...
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