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The Truth about Collections!!

Biggest Questions About Debt Collections & Your Credit!

Is a Paid Collection Better for Your Score Than an Unpaid Collection?

The answer is no, which could be surprising to some. However, resolving a collection provides other benefits, such as preventing the debt from being sold to another collections agency that could place another collection on your report, or lead to a lawsuit resulting in a judgment — both of which could drive your score down even further.

Are Multiple Collections on a Credit Report Worse for Your Score Than a Single Collection?

Not necessarily. The most important factors that affect how collections impact credit scores are those that look at how recently the collection occurred. As a result, you could, for example, be fortunate enough to get one of two collection debts removed from your credit report, yet see no score improvement if the remaining collection is the more recent of the two.

Does the Amount of the Collection Debt Matter?

Not at all, if the lender is using an older version of FICO — which is most likely, since the older models continue to be most widely used by lenders. Even if the newer versions are being used, the amount won’t matter if the debt is more than $100.

Will Settling or Paying a Collection Impact My Score?

No. Since, as we’ve learned, neither the dollar amount of a collection nor the paid vs. unpaid status has any bearing on the score, there’s no scoring impact from settling the debt.


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