If I pay off old collection accounts that are on my credit report, will my score go up?

Question

Once they are marked paid collection, they may not get taken off my credit. But will paying them caus my credit score to go up?

Answer 1

Only if you get a pay for delete agreement from the collection companies.

Without this agreement, your score will actually go down since the accounts will be considered new if you pay them rather then old if you do not.

If they agree, get it in writing before you pay them a dime, verbal agreements mean nothing.

If they do not agree to the pay for delete agreement then you have to make a decision, do you want to pay them or simply wait until they drop off your report after 7-years.

Answer 2

YES, this is true, and let me explain why. The two things to consider here is that A) your Fico scores are mainly made up of the last 24 months of activity and B) once a collection account is posted to your credit report, it has done the worst damage it can do. As time goes on, those old collection accounts have less and less of an impact on your credit score, but if you pay them off it will make them appear more recent (due to new activity) and your score drops. This happens because all the negative information about charge off and collections is still there, it just shows a zero balance and paid. This is my many others and myself advise people to NEVER pay off any old debts unless the collection agency agrees to completely remove the listing from your credit report. Think about it...why pay a debt and have it still hurt your credit? Edit - Matt is incorrect...NOTHING can legally reset the 7 year reporting period, this is clearly defined in the Fair Credit Reporting Act.

Answer 3

It’s no secret that debt collections are bad for your credit report. Any past due account, debt collections included, has a negative effect on your credit score.

Potential creditors and lenders question your creditworthiness when they see collection accounts on your credit report. You might find it harder to get approved for new credit cards and loans with collection accounts on your credit report. If you’re working on repairing your credit, or just cleaning up your credit report, you might question whether you should pay a collection, especially if it's an old one.

Moral Reasons To Pay
If you’re liable for the debt, the right thing to do is repay it. You’ve already consumed the goods or services financed by the debt, it’s your responsibility to pay for it. Can your employer get away with withholding a month’s salary? The same should be true for debt.
Effects of Paying
Paying an old collection can lower your credit score in the short term. How does that happen? The older they get, the lesser the effect collection accounts have on your credit score. When you pay on an old collection account, it renews the date of last activity. So, your credit score could drop when you first pay an old collection. Fortunately, you’ll see your credit score come back up as time passes.

If the account is scheduled to fall off your credit report in the next few months, you might put off paying it until that happens. That way, you can avoid the initial drop in your credit score.

Payment Benefits
You have no unpaid collections influencing your credit score. Paying off a collection account gives you points in the payment history portion of your credit score.


Your debt-to-income ratio decreases. When you eliminate a debt, you decrease your debt load and your debt-to-income ratio. This is good for your overall financial health.


Lenders and creditors will be more willing to give you new credit when you have no outstanding obligations. Many lenders, especially mortgage lenders, require you to take care of all unpaid debts before they’ll offer a loan to you

Answer 4

Yes it will but it may take some time. Make sure that you get a written acknowledgment from the collection agency that the bill has been paid in full or, that it has been "satisfied" if you pay less than the total amount owed. You can send a copy of the letter to the rating agency if they do not properly record that the debt was paid

Answer 5

Negotiate a "Pay for Delete" in writing...where they agree to remove it entirely....A "paid" collection notice on your credit report will still be a big negative. Remember, all terms in writing before paying them anything. Never accept deals/terms verbally over the phone...they are meaningless and the other party can always deny that any deal was made once they get your money.

Answer 6

Yes, but I would advise you to get them to agree to remove all items from your credit report before paying them anything. A "paid collection" on your credit is worse than no collection at all.

Answer 7

How old are you talking? Negative items on your report drop after seven years. If you are not getting harassed about them, I wouldn't mess with them. I don't think your score will change that much, but if you have money to burn (just won the Lotto?) then pay them.

Answer 8

yes and no... you have to create good pay history for it to go up... but if oyu have a ton of collections on there then it cant go up even if you are paying good on some things... but once they are gone lenders will be able to see that you had a rough time but you go t through it... and thats what a lot of them like to see...

Answer 9

It will. Pay if full as opposed to a settlement, it reflects even better in your score.

Answer 10

yes!!!