What time frame can I expect now that I'm paying off old debt for my credit score to go up?

Question

I have a score of 416. I have 8 debts that I am beginning to pay off. They total about 5000 dollars, and I estimate it will take me a year to pay them off Two of the companies have agreed to delete them from my report once paid, but the other companies will only show them as a paid status. My concern is that with those, paying them off won't actually help my score. I would like to know exactly what paying a debt that has gone to collection does to my credit score, if anything, and how quickly I can expect things to improve. I do have 2 credit cards that I pay on time every month, so they are helping my score. For every debt that I pay,. what can I expect my score to do? And is it worth it to pay the older debts that they won't actually delete (most of them will fall off my report between 2010 and 2011). I've heard that you should not pay old debts unless they will delete them cuz they don't actually improve your score if they aren't deleted. I would appreciate professional advice.

Answer 1

It is most likely going to be a slow process for you to raise your score significantly.  From my understanding and experience, credit scores don't change when a collection's status is marked paid.  Sometimes, your score even drops a bit when you pay a collection since it makes the collection more recent.  Nevertheless, it is better for potential creditors to at least see you paid the collection.  It is incredibly good that you negotiated a pay for delete on two of the collections - you will see a score jump when these collections are deleted, although it may not be huge.  Your good credit accounts, as you pay them every month are really going to help you.

You may want to start tracking your score with a score monitoring service.  Bank of America Privacy Assist tracks all three scores quarterly for $12.99 per month (although it took me months to actually stop charging me once I cancelled my account).  MyFICO.com has a bunch of services that track credit as well and I consider them to be a more honorable company:  http://www.myfico.com.  I now subscribe to the Quarterly Monitoring service ($4.95/mo) on MyFico which tracks my TransUnion score and report quarterly  and notifies me of any account status changes, new accounts, etc.  It also allows you to simulate how certain actions you take can affect your score.   I will say it's been fun to watch my score change over time - in 7 months my score has gone from 590 to 680.

Answer 2

oh my god your credit score will go up about ummm I'd say 30 points at the most. Those collections that are in your credit report don't matter anymore...if you pay them or not. By law FICA is forced to take out your negative collection account after 7 years....10 years for bankrupcy. I've been trying to better my score for more than a year and it has taken me FOREVER to higher my score.