Paying collection to increase my credit score

[Ashley]

How much will it increase my credit score if I pay off a debt that has gone to collection?

I’ve been irresponsible and didn’t pay my old cell phone company. So the debt was sent to collection, and now my score has taken a hit.

The debt is from 2010, and it went to collection on 2011. It’s only a small debt – $300, so it was a mistake no to pay it on time.

[Erick]

Re: Increase my credit score

I’m sorry to bring the bad news to you, but paying off the collection won’t rais your credit score.

Paying off derogatory items doesn’t improve your score. The damage is done and the item will remain on your credit report for 7-1/2 years. It will age off your report 7-1/2 years from the date of first deficiency (default). Nothing can restarts that clock.

That doesn’t mean that you shouldn’t pay it off. First – they may sue you right before the statue off limitation expires. Second – creditors look at more than just your score. It does look better to creditors reviewing your credit report if derogatory items are paid.

The only way to raise your score is by making a Pay-for-delete-agreement, in which you agree to pay all or most of the debt, in return for the collection agency agreeing to remove the negative item of your credit report. With the item removed, your score WILL improve.

Pay for delete agreements are not easy to get. Is your debt a credit card debt? If so then you’re wasting your time because even with the collection entry gone, you will be left with the credit card charge-off entry. Even a pay for delete cannot remove it.

Pay for delete may work only for one time items such as unpaid utility bills, medical bills, police tickets etc.

See why-pay-off-debts.html and how-to-pay-off-debt.html for a more detailed explanation.

[Author]

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