collection: Credit Tip #1 - Paying Off Collection Accounts and Charge Offs - 03/11/11 02:17 PM
Think twice before you pay off collections accounts or charge offs.
For someone wanting to pay off collection accounts, it is suggested that you do it as part of the loan approval process.  Paying off a collection account can actually bring an old account to a current derogatory status.  That may in fact lower your credit score instead of raising it.
If you are not planning on purchasing for several months or longer, then paying off a collection account may actually help you.  There are some creditors who will continue to report the account as delinquency each month that the debt goes unpaid.  Paying off … (11 comments)