Need advice

Submitted by Anonymous (not verified) on Mon, 07/17/2006 - 10:59

I have 4 collection items listed on my credit report. Will my score improve if I pay these accounts? Can you give an idea how much improvement will it show? I am going to buy home next year and my credit is not that good.

Hi scastro,

Welcome to the Creditmagic forum.

Collection items refer to items that are delinquent with the original creditor passed on to a collection agency and is subject to realization. It stays in your credit report for seven years plus 180 days from the account was first reported delinquent. Any negative items be it charge offs or collection items hamper your credit profile. Lenders always look for these negative items while processing your credit application. They are like warning signs and applications having negative items are often denied by credit granters.

If you have 4 such items in your credit report, it’s better to start paying them ASAP. Once they are paid the status of the items will change into "paid collection" which is better. It tends to give a feeling that you are trying to better your creditworthiness. You may also negotiate with your creditor/collection agency and try ‘removing’ these negative items from your report. Be sure to get it written before you start paying off.

Paying off your past dues will help in improving the image of your credit profile. But it won’t help in improving your score. Since your credit is not good and you are planning to buy home next year it is advisable to try your best in repairing your credit. Let us know how we may help you do that.

Good luck!!


Tue, 07/18/2006 - 04:54 Permalink

Before you start paying your past dues off check if the items are inaccurate. If you find they are, you need to dispute it with the CA and the CRAs to remove them from your report. Since you are planning to buy your 'home sweet home' next year, scan your report very carefully and dispute any inaccurate info that appears in your report.

Cheers :)

Tue, 07/18/2006 - 05:13 Permalink