I speak from experience too. As a 9 year veteran as a loan officer reading credit reports.
I have run score simulations for clients. Sometimes it lowers the score. Sometimes it raises the scores. Sometimes it does nothing.
Having a loan officer who can run the ACCURATE score simulations is a lot better than calling some credit repair hack who wants your money.
Consider the previous post SPAM!!!!!!!!!!
Your best resource is MyFICO.com as they are owned by the people who developed the FICO score.... The Fair Isaac Co
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I see you've received lots of conflicting responses. Here's the correct response based on my professional experience as a Mortgage Banker and based on MyFICO.com and their education tab on the website: Recent activity on ANY credit account (whether that be a good or a bad account) has a lot to do with your current credit score. If you're paying all your bills on time, that's a good thing and that has a positive impact on your credit score. By contrast, if you pay off a collection account and the collection agency updates your credit report to reflect that account as PAID, then that recent activity will have an effect on your score, albeit a negative one.
You should know, also, that depending on the loan program you're applying for the mortgage with, you may not be required to pay off a collection account depending on the circumstances of that account. Therefore you want to identify and meet with a Local Mortgage Banker to get prequalified BEFORE you pay off any collection accounts. Your Mortgage Banker will review your credit report and other qualifications and can guide you accordingly on whether or not to pay off the collection accounts.
For other information about credit from a non-biased source I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website. http://www.consumer-action.org/
Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE. http://www.consumer.ftc.gov/articles/0058-credit-repair-how-
If you determine you will pay off those collection accounts, see my advice on my Trulia blog about how to pay off a collection account linked below.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
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Your credit score could drop temporarily but will go back up with time.
Anna Maria Durr, NMLS 266699, TREC 596662, Codemark Financial
2626 Richmond Ave., Houston, Texas 77098
Tranquility Credit Repair
Caravan Credit Services
Credit Recovery Group
Improve My Credit
Information from the Federal Trade Commission:
Now, collections usually do not need to be paid as a condition of loan approval. I wouldn't touch them until after you get a mortgage.
If you are trying to buy a house, your loan officer might have access to a score simulator that they can apply to your credit report.... I have done this for clients.
Not at all ... in fact it will eventually raise it. But be aware that lenders are more concerned about the fact that the debts went to collection in the first place. Paying them off will ultimately reduce your debt ratio, which will positively affect your FICO score. Pay off those bad accounts. I wish you well.
(0 balance )and that they will take it off the credit report.
Hope this will help you.
Feel free to contact me if you need assistant.