Trans union - Score Went Up After Paying Collection

Discussion in 'Credit Talk' started by kev0153, Jul 26, 2016.

  1. kev0153

    kev0153 Member

    So this is weird. I paid off an old Time Warner bill that I missed when I moved and had gone to collection. All I've read says that paying off old collections tends not to raise your score. However, when this account changed from in collection to paid it appears my score went up 20 points! I'm not complaining but seems to go against the general knowledge. I had no pay to delete arrangement set up. I'm not sending a letter of goodwill to see if I can get the whole thing removed.
  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Are you positive nothing else changed on your credit reports? And are you referencing a FICO credit score? Paying the collection should really have no immediate impact on your FICO scores, but congrats on the 20-point gain nonetheless.
  3. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Your post intrigued me so I started doing some more research into the newest version of the FICO credit score- FICO Score 9. I came across this quote from one of FICO's recent press releases:

    "Among many enhancements in FICO® Score 9 is the way consumer accounts are treated after they are sent to collection agencies. First, any collection account that is paid in full is disregarded. Second, FICO® Score 9 differentiates unpaid medical accounts in collections from unpaid non-medical accounts in collections. FICO's research found that unpaid medical accounts were less indicative of credit risk than unpaid non-medical accounts. In fact, building the most predictive credit score requires treating medical collections this way."

    To me, this means that the new FICO 9 credit score simply disregards paid in full collection accounts. In addition, the FICO 9 credit scoring model is looking at medical collections in a different light as well, which means they likely don't have as great of a negative impact on your credit score as unpaid non-medical collections.

    So maybe this is what you're experiencing with the Time Warner collection you paid in full? If so, this is a really positive change for consumers and one I definitely need to research more. The FICO 9 Score was made available to consumers this year; however, I doubt many lenders have adopted it already. Lenders move very slowly on this kind of stuff.
  4. kev0153

    kev0153 Member

    It's always hard to tell what is changing when using credit karma. I believe they use vantage.
  5. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Yes, CreditKarma provides the VantageScore, which I believe still treats both paid and unpaid collections the same.

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