Old "Closed" Accounts

What's holding your score down is the two collections. Those are easily good for a hundred points or more. If you want to clean up your report, those are the first ones to go after.

Paid/Settled is not a good thing, either, so you might try disputing those and see if they magically disappear. Depending on the lender and their age, they might just fall off or they might come back verified. Nothing ventured nothing gained. If they come back verified, you're no worse off than before.

It also looks like you need come current and positive trade lines, like a new bank card and a revolving account (e.g. Crown Jewelers is a popular one) to show you are using credit responsibly and to help change your utilization. Just don't mess up with the new accounts! Charge a couple of things you would have bought anyway (e.g. groceries) and pay off the balance over a couple of months to show activity (paying it off at once doesn't help the score much, even if it's more responsible).

If you start now, it's entirely possible to get you up to the 600s in a year or so (but I'm not making any guarantees, of course).

 

I wouldn't say that two collections are costing the OP 100 points unless they're debt purchasers.

Moreover, getting brand new accounts isn't going to help much in terms of scores. This is because it takes an account at least six months of history to accrue any points by way of history or payment history. It may help in terms of avaliable credit but, that would probably be offset by the fact it would be a brand new account. Not to be a jerk here but, with a 520ish score, the approvals would be very sparse and the limits marginal. In other words, the avaliable credit would be so meager it would accomplish much.

I do agree that challenging old collections and settled accounts may have a benefit. However, deleting those are going to remove some history.

I may be deemed as making a pitch here but, it seems as the OP needs some history and there is only one way to get it in a rapid fashion. We all know what that is and I'm not going to go into it.

If time isn't of the essence then yes, just getting a few accounts like Orchard Bank and Crown Jewelers would suffice. But . . . that is a long process. Conversely, this person may be able to swing up into the mid-600's fairly rapidly given the right approach.

 

How the OP proceeds depends on what their goal is. I read the post as the OP wanting to clean things up but was in no particular hurry. To that end pursuing the collection accounts for removal and (after getting them off the report, maybe) getting some new accounts to show some positive history. This process could take a year or so. If they are in a hurry to get some better scores first and foremost, there are other options.

It's good to have options

 

Yes. The paid collection is not going to help at all either.

What Apex is hinting at, but not pitching (his company offers the below described service, for a fee) is that the fastest way to get your score up is to have some Authorized User accounts to your report. Your first option for this type of thing is always to look to family and friends. What you need are bank card accounts, that have completely positive history, and are several years old. This friend/family member adds you as an Authorized User. You are not financially responsible for the account, nor do you even need to physically have a card. You want a card that will report AU's, like Citi, B of A, etc.

You get the benefit of their good history, and that will be the fastest way to see your score jump.

Your other choice is to set more realistic goals (1 year of new good credit, paid on time, not over utilized), and your score should start climbing).

 

Unfortunately the current scoring model counts a "paid" collection as negatively as an unpaid one. Worse, paying moves the date of last activity up so it'll stay on your report for 7 years after the date it was paid.

It's all part of the "no good deed goes unpunished" law of the universe. The good news is at least if it's paid they can't sue you over it (well, in theory, anyway .

 

WHAT? I just asked this question and got a different answer.
That it goes by the date of charge off even though you paid it off on another date.
Or does this only apply to an OC?
Thanks
Woofer

 

My understanding was (and I could be mistaken):

-- if you have not paid it off, then the 7-year timeout starts on the date of the first delinquency that was never brought current. This usually amounts to 30-60 days after your last payment.

-- if you make payment arrangements, then the starting date is reset as though it was brought current.

-- if you pay it off, then the starting date is reset because it was brought current.

So, if you have a collection account with a DOFD of 4 years ago it will drop off in 3 yrs (assuming they don't sue you and get a judgement in the next three years, of course). But if you pay it, today, it will report as a paid collection for the next seven years.

Consequently, if you're going to pay a collection, it's better to do it sooner than later. If you're not going to pay, it's often better to NEVER pay than to wait. But the best thing to do is to just get the darn thing off your report either through a PFD or Dispute (or never let it get on there in the first place).

Again, I could be mistaken. If so, I hope the net.wisdom will come to the rescue.

 

I have found that it is very hard to get an OC to do a PFD.
I hope you're mistaken about the date thing.
So what say you guys???

Thanks
Woofer

 

Not on a charge off, collection, or a judgment. None of these can ever be brought current, or be a positive (OK a charge off can, if negotiated right). That is not to say that furnishers (like JCP as posted) don't attempt to re-age the account. The way that some of the CRAs, in particular , Experian, report - can make a paid off account appear newer to the scoring models and drop your score.

 

If you do pay it off, you have to be careful how you handle it. One "trick" used by CAs is to get you to agree to several payments. You know, to make it easier to pay it off.

BUT

What they are really doing is getting you to agree to take out a new loan to pay off the old one. i.e. they are really lending you the money to pay off the original account so the original debt is now paid and you are now making payments to pay off this new loan. So, when they report it, the "7-year" date is now the date of this new loan instead of the original account (the one you thought you were paying on). You may or may not realize this is what you are doing at the time. But what it does is give them a new date from which to compute the SOL. They use this as a way to extend the dates on debts that are near SOL (e.g. JDB).

Consequently, if you're going to pay, pay all or pay nothing to prevent this from happening. This is why you don't even want to send them "just a little bit to show you're good intentions" or however they might try to guilt you in to paying.