Will paying the collection agency off on my credit report bring my score up any?

Question

In the military and have been gone a year, when I returned I ran credit report and found two collection agencies (phone, utilities) from my last move. I payed them both off. My credit score is only 600 and I want to buy a house in next 9-12 months. With this score I'll never get a mortgage.
How fast will your score come up if you take care of the bad things on the report and pay all bills on time or in full?? Person who was watching my affairs did not do a great job.

Answer 1

Thank you for all the good work you do protecting America. As a Veteran, I salute you.

To answer your question, no it will not help your credit score. You have a 600 score, so you will qualify for a mortgage loan. You will pay through the nose in interest, though. But some of the lenders in my network would definately be able to get you a loan with a 600 score.

But you have another option. You could try a credit restoration. If you are looking to buy a house in 9-12 months, this might be the way to go. It will clear the negatives from your report (yes, even if they are legit) and your score will start to rise immediately. There are naysayers out there who will tell you that this is not a legitimate thing. They are just too lazy to educate themselves. If you read the Fair Credit Reporting Act, it tells you that you can have any information removed. Nothing has to stay on your report for any length of time. If anyone tells you otherwise, you tell them to email me and I will quote chapter and verse to prove them wrong. Yes, it is true that you can do it yourself. But you can also represent yourself in court, fix your own car, build your own house and buy your own insurance. But you don't. There are professionals to do those things for you because they are trained to do so. The same is true with credit restoration. But be careful if you choose this route. There are ONLY THREE legitimate credit restoration companies in the United States. So do your due dilligence BEFORE you sign up to use one.

If you have any questions regarding credit issues, you may email me at [e-mail]

Answer 2

Wow. Paying off collections older than one year old does hurt your credit! Why? Because it shows on your credit report that changes have happened recently meaning that it last reports the last update now for last month rather than 12/05 or whatever.
A 600 score is okay to get a mortgage but I suggest that you try to have at least a 660 or higher. I work as a mortgage broker in california and a company that we're partnered with specializes in optimizing credit. If you want assistance you can shoot me an email and I'll refer them to you.
Do not believe anything you hear from normal people about your credit; 80% or more don't know any better.
I've seen my client's credit go up 30-60 points in as little as a month and there are lots of little tricks and tips that you can get on how to make your credit shine. Contact these people on this website below (that's who I refer my clients to) and they'll tell you what they can do before you have to pay so you know what you're getting. Write me if you have any more questions.

Answer 3

Yes, in fact it is vital to bringing up your credit score. When resolving issues with a creditor or collection agency, that agency will in turn report the account issue to the corresponding credit bureau as being "resolved". The longer the account remains unpaid, the more damaging it can be to your credit. It may take some time to repair the credit, but I don't think a phone or utility bill should effect your loan that much. Explain when applying for the loan what has happened. Sometimes you may catch a break depending upon the lender. Chances are, it may have only been reported to one of the three credit bureaus.

Hope this helps, and find someone reliable to handle finances next time!

Answer 4

There are other factors involved than just your FICO score when trying to obtain a mortgage. With a 600 FICO score you can potentially obtain a mortgage. Paying off those collection accounts will not immediately increase your scores. What you want to make sure is that you have clean and active credit establish to help you when you do start looking to obtain a mortgage. If you need to establish more tradelines, start with a secured credit card. Also start saving money to show as assets (generally 2 months worth of mortgage payments), that is something banks sometimes require and they want to see that you have had it stashed away for at least 60 days...just a helpful hint rather than having to try and scrambled at the last minute, believe me I've seen it happen to people.

Answer 5

Unfortunately, paying a collection does not affect your credit score immediately as the collection will still remain on your credit report for 7 years. As the collection gets older you should see your score improve. To improve your score you want to keep your balances on your credit cards down to abt 40 percent of each credit limit. Don't apply for anything as this may lower your score. Keep paying your credit cards on time and that's the about the best you can do. Good luck!

Answer 6

1) Don't manage your financial decisions by FICO scores. If you do, you will actually ALWAYS put yourself into MORE debt than less. 2) If you owe money, pay it. 3) Why are you leasing? That's going to cost you more than any interest savings due to FICO scores in the long run.

Answer 7

it going to take a long time when u pay the bills your score might go up a few points .but that it

Answer 8

yes