Is my Credit Rating affected????

Question

I settled an argument with Verizon about three months ago, in which they had sent me to a collections agency. So what I did was to settle the dispute with Verizi, once i did I called them and they told me that they would contact the collection agency and tell them to put me off their list. However now i tried to get a loan and they told me that i couldnt since my cerdit score was too low. They told me that my cerdit score had gone down more that 100 points over a simple dispute. So i called Verizon and they told me that everything was cleared and that nothing showed up in my account. So i went to the colections agency and they told me that everything was cleared in my account aswell. However i dont know why the collections agency deducted my point form the Crdit Beareu. Now i paid everything including the total i owed collections agency and I want to know that since I paid the total will my credit score go back up as it was 720??? Please help

Answer 1

No, your score will not go up for paying off a collection. Unless you have a letter from Verizon that states the account was erroneously placed on your report (and it sounds like this is not the case), then you will not be able to get your points back.
The only things that raise your scores are 1) paying your bills on time and 2) reducing your debt ratio on current accounts.

Answer 2

Okay to clear up a couple of things. The Collection agency does not directly deduct points from your credit score. They only report information, it is the company that does the scoring that takes this information to compute your score.

It sounds like you may have done everything except to verify your own credit report. You are allowed 1 free one per year from each credit agency by going to http://www.annualcreditreport.com . In your case since you were declined you can also send a copy of the letter to the reporting company and get a copy of your report for free, as long as you do this within 60 days of the letter.

If the report shows the collection account it should show a 0 balance as should the verizion account. If either of them have a balance more than 0 then you must dispute it with the Credit Reporting Agency. When you dispute it they will verify with the original company and if in fact it is paid it will be corrected on your report. If you have a letter from either of these companies showing you are paid that will help a lot and speed up your dispute.

An UNPAID Collection is very bad, but once it is paid your credit will start to improve. It takes time to get back up but how fast depends on your credit management and the rest of your history.

Before you paid the collection agency you should have negociated with them to remove the collection account once paid. You should still call them and ask if they will remove it now, they may not though. However, if they do remove it that will help quite a bit, because it will be like it never happened.

If in fact it is not on your report anymore and the rest of your report is correct then you have other issues to take care of.
You need to first make sure all of your credit cards are under 30% of the limits. That is if you have a total of $2,000 limit over all of your cards you should not be over $600 useage. Anything above that can really hurt your score. Also, be sure to pay everything on time and only apply for credit when you need it.

Answer 3

What happened was that Verizon did clear the account for you, as did the credit agency. However, it will still show the delinquencies in your credit for 7 years. To increase your score, pay your cards down to below 50% utilization level and on time every month. You can also try this:

I actually have been letting my sister piggyback off of my credit. Her credit has increased to 710 from 507 in six months. She had the worst credit in the world and it has really worked out for her. There are websites that will sell you credit cards to piggyback off of, but you need to make sure you do it before September, since the people that create the FICO scores are going to be taking that into account. Best of luck