Paying Old Collection Accounts Bummer

I had a credit score of 583 and about $2300 worth of collections and negative things on my credit; 4 months ago i paid all of this off. Today i checked my credit, and it only went up 13 points to a 596. I have a mortgage that i have never been late on. Why didn’t it go up more? I need an auto loan & my bank won’t lend me the funds due to my score…! I need answers.

Jason

———–

Jason,

I’m actually surprised it went up and didn’t drop about a hundred points instead.  When you pay off older collections it renews the Date of Last Activity (DLA) and destroys the credit score. 

i.e. If you pay off a collection from 2004 today, it will appear and effect the credit score as a collection from DEC 2009.   If your score actually went up then I would say you are very lucky. 

I’m sorry I don’t have better news for you,

Brian C. Aber
Senior Account Executive – HTDI Financial Charter Board Member – National Association of Credit Services Organizations
877-877-4834 x704