Can I increase my credit score by paying collection items?

[Jackie]

I have 2 collection accounts from unpaid medical bills (for $100 & $500). I need to raise my credit score for a new car loan. Can I increase my credit score by paying off these collection items?

[Troy]

NO
Collection accounts remain on your credit report for 7 yrs, paid or not.

Even if you pay them off, they continue to appear on your report and ruin your credit score.

[Kendric]

Not entirely true
It’s true that the collection accounts won’t come off your report, but FICO treat unpaid collections worse than paid collections, so you can expect a small increase in your score.

After you pay the collection off they will update the balance on that account to show $0, and that will improve your score a bit.

[Janie]

You need to pay them regardless
Any potential lender will actually pull your credit reports, not just your scores. Lenders don’t like to see unpaid debts. Most require that you pay off all collection accounts, late payments, charge offs etc before approving you.

[Doug]

Try a PFD
Unpaid medical bills are perfect candidates for a Pay-For-Delete agreement, because the collection accounts are ‘single’ accounts, i.e. they don’t originate from a charge off.

If the collection company agrees for a PDF and delete the account entirely – you’ll see significant improvement. You may need to pay the collection the full amount to convince them to go ahead with a PFD, though

[007creditagent]

Hi Jackie,

In my experience, it is possible to remove collections from your credit report.
A collection entry on your credit report will lower the credit score and in many cases prevent you from obtaining a mortgage or auto loan. A collection entry actually hurt your credit score badly.
Before we get into how to remove collections from your credit report, I want to share my story.
During my college times, I bought a cell phone with AT&T. The phone service has some issues so I switched to Verizon. I forget to AT&T payment to be paid.
And finally it ended up as AT&T collections and showing up on my credit report. Then I paid the collection so as to remove it from my credit report.
However, it wasn’t removed, it was just “paid collection”. I followed these steps to get it removed.

1. The first step is to mail the collection agency a “goodwill letter” and request a Goodwill Adjustment from the Collection Agency.

2. The next thing you should try is the advanced dispute method.
For this method, you will need a current copy of your credit report that includes your credit score for free. Once you have your credit report, find the entry of the collection you want to be removed and verify that is listed.
If you find anything that is inaccurate, note it. Check the following items on the collection entry for inaccuracies:
• Balance
• Account number
• Date opened / Date closed (check all dates)
• Account status (e.g., Closed)
• Payment status (e.g., Collection)
• Credit Limit
• High Balance
Note anything else that appears to be inaccurate and write a letter. Using this letter, you will demand that each piece of information is corrected or that the collection be removed.

3. If you’re unable to find any inaccuracies on the collection entry on your credit report, next you should write the collection agency and demand that they validate the debt.
Under section 809 of The Fair Debt Collection Practices Act, collection agencies are required to validate debts they are attempting to collect.

Thanks!

[Author]

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