Does paying off collections improves credit

Most of the people get this question in mind by paying collections can improve credit. The answer is no. Only there will be change in the status of collection in your credit report by showing paid collection from unpaid.


A FICO spokesperson has said that collection on the credit report can damage the FICO score up to 100points, which is huge. Also they say one major fact is collections that get listed on the credit report can lower the FICO score obviously that is also clear.
The secret behind better credit report blog or credit score is removing such items or negative things from the credit report. If you follow certain things, like paying off debt collections can easily affect your credit reports.
In case if Portfolio recovery cannot able to collect payment until either they sell your account to any other agency. The new collection starts will calling you, send letters and starts reporting many negative information on the credit report. In other options is they go for legal settlement by filing lawsuit against you. They can sue you to do payment, if it happens you get notification from court with summons. You should appear in the court; even you do not have money to settle the case.


If they win this case and consumer not shows anything in defend, they get judgment in default if not appear also. Getting the judgment against you is very serious. The reason is it leads to wage garnishment, your asset gets seized and lien against you and your property. Every state has got unique law, so know about your local legislation in full details. The worst part will be if you are judged on your credit report files, you score will get obliterated by overnight.
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