restarting the clock????

Wow, a collector that got it right.

No, paying it will not restart the clock. What does happen is that the payment sometimes changes the Date of Last Activity, or the Date of Status, and make it appear newer to the FICO idiots. Paying it will likely cause your score to go down, but it will still fall off at the same time (assuming everyone involved follows the law ).

 

I strongly disagree, from much experience. It will most probably restart the 7 year clock from the date of last activity. Paying this in the last year is very unwise.

 

Your question is a good one because it is a common misconception that by paying off all collections, your credit scores will increase. In reality, this is rarely true.
The reason for this is because, among other factors used to determine a credit score, the "date last active" will change on these collection accounts once they have been paid, and keep them on your report for another 7years. It simply means the date the account (regardless of type) had any activity on it, whether it be a credit, debit, transfer, etc. continues to run. Pretty straight-forward.
So let me try to explain: Let's say you have a collection from a long-forgotten medical bill (probably the most common collection), with a last active date of 08/99, with a $500 balance. Because this is such an old, inactive collection, it's effect on your credit score has been greatly diluted by more recently active credit (such as your current mortgage, car loan, active credit cards, etc.), and is likely only lowering your score slightly. If you were to pay that collection off in an attempt to gain points, your efforts will have an opposite effect in the short-term. By paying off the collection, you will bring the last active date of the collection to the current month (now would be 10/03), and although it will now reflect a $0 balance, the fact that you have a recently active collection on your credit report is more derrogatory than an old collection with a balance, and will remain.
Craziness? Absolutely. Can you do anything about it? Nope.

 

I don't know why this argument continues. The 7 year clock starts from the Date of the First Delinquency in which you never caught up. NOTHING CAN LEGALLY change this date, or start the clock over. Yes, payment *can* trigger the appearance of a newer collection and cause your FICO to decrease, but it still must fall off at the original time, and there is ABSOLUTELY something that can be done about it.

 

jlynn is correct; you cannot confuse "restarting the clock on Statute of Limitations for legal recouse of debt collection, with credit reporting SOL. A partial payment can "reset the clock" for debt collection SOL, but it does not reset the clock LEGALLY for reporting SOL.

Yes, in the real world there are CAs who will try to reset the reporting clock, to continue leverage for colections, but as jlynn stated, this is illegal.

 

Dimwits at the CAs and JDBs can cause this. They shouldn't but they do.
Nothing malicious, they're just dimwits.

 

If you do pay it, you could send a "goodwill" request to the OC asking them to remove it. Sometmes they will, sometimes not.

 

Don't pay it

It's not worth the risk since you're in the last year. It might just add headaches.

NG

Contact me if interested in using your good FICO to make BIG money.
This blows selling authorized user spots completely out of the water!

 

My only question, are you giving us legal advice?

 

Three FTC Opinions are found here:

www *.ftc.gov/os/statutes/fcra/index. *shtm

***remove the spaces***

If I read them correctly, the clock starts with the start of delinquency and does not change.

 

Correct, as jlynn says. In some states, making a payment can restart the clock for collections SOL, but it can't change (legally) the reporting period.

 

This is another argument that will just never die. Too much misinformation.

However, I agree. Just let it be in order to preclude the loss of points and the chance of error.