Collection Reporting Wrongs

Why is it that paying the collection agency without getting a PFD can lower your score? How does FICO come up with that calculation? Why won’t your score raise with a paid in full or 0 balance?
Oh…Awesome website by the way.

Chuck

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Hello Chuck,

It has to do with the timing.  First, paying an old collection will likely reduce a credit score.  On the other hand, if the collection originated within the past two years, then you may see an increase in your FICO when it is paid.  Hold the phone – we’re not done with this.  The problem is that the credit reporting tactics of collection agencies have the effect of making these items appear more recent than reality and the most egregious example of this is re-aging. 

In conclusion, this is the credit reporting system we live with.  These are the collection agencies we deal with.  The Broken Credit Blog fights for consumers.  Pay for delete is a solution for many.

Thanks for the questions and hope this helps.

Paul

P.S. Of course there are many other solutions in the Broken Credit Blog’s credit repair library.