Seeking Advice On Improving Credit Score
Currently my FICO score is 655. I guess that is about average, but I would like a score of at least 700. I used a score simulator at ****Must Reach Senior Investor status before posting URL's*** and it said that my score would go up about 20 points once my creditors report that I have paid off my balances. So now I can figure I have 675. There is one collection account on my report. (I do not think I actually owe, but that is another story). I called the collection agency and I was told that if I paid half that it would still show up as a collection item but it would just have a zero balance. I was told if I paid the whole amount that the item would be marked for deletion within 90 days. The collection account was opened in Feb of this year. According to ****Must Reach Senior Investor status before posting URL's***’s analysis of my credit report, the only negative thing about my credit is that I have this one collection account and that it was opened recently. I am not sure if I should pay the whole amount (it’s not much, only $138) or if I should settle it for half. Will doing either one help get me to my goal of 700? I guess I have 3 choices – do nothing, pay half or pay all. Which do you suggest would be best to help me get to my goal?
I had the same issue of sorts. I disputed a claim against me for which I thought I had paid a year previously. Bottom line is I paid the full amount to the collection agency. The collection on my credit report still remains 4 years later. And I have been told it will remain for 10 years. A year to the day I got another collection letter from the same people .... this time I had my cancelled check, even then I was "put through the wringer" even with proof of a paid collection.
I still believe that I had already paid the original bill and the fact that I had moved 2 times and never received a collection letter until it was "too late" didn't matter. I paid and it still showed up. Either way it will show up on your credit report, but it is better for your report to show paid with explanation vs not paid.
are you looking to be able to purchase property?
one thing that makes you more lendable and, i believe, improves your score is to have more than one active trade line of credit. 3+ with 5k max is best, but you have to have them at less than 70% maxed.
the absolute best thing to improve a credit score is on time mortgage payments.
I've not seen it done personally but I once read a book that recommended building a relationship with a rep at the original creditor and getting from them or thier manager, in writing, a promise to report the debt as incorrect to the credit reporting agencies if you will pay in full. So, after you've recieved the letter and paid, you dispute the accounts on your credit and when Equifax, Transunion, etc. try to verify the account, the creditor doesn't respond in the 30 day window or responds that the account is not valid thereby removing the record from your credit completely.
Chip
It is not a lot of money. If you really owe that money, you should go ahead and pay it off (full amount). After you pay it off, the collection account will be marked as a paid collection account and it will remain in your credit reports for seven more years. All the bad credits disappear after 7 years, except banktrupcy.
Good ones remain for 10 years.
If you don't owe it, dispute it! Sent a letter to the credit bureau stating that it is not your debt and you don't owe it. (Don't argue your case just yet. Just state the facts.) If they cannot prove that you should pay, then it will be taken off your record.
I agree that if you owe it, you should pay and work it out with the collection agency, but if yo udon't owe it, don't pay it. Get the credit bureau involved. That's what they're there for.
Ronnie
Another thing that will raise your score is to close out open-ended accounts.
If you have a sears card, JCPenney, MasterCard, VISa... Call the company (Even if you have a balance) and tell them you want to close the account. You will still pay the bill. You will still get statements, but the credit line will be cancelled and your FICO score will go up.