How Do Collection Accounts Affect Your Credit Score?

Credit scoring agencies use your payment history, which includes collections, to figure out your credit score. This means that collections can hurt your score.

But depending on the scoring model, paying off collections has different effects on your credit score.

For example, FICO says that collections that are more recent tend

to have a bigger effect on your score. But paying off a collection account could make your score go up, down, or not change at all.

If your credit is in good shape other than the collection account, paying it off is more likely to raise your score. Plus, accounts that were worth less than $100 when they were opened don't count toward your FICO Score 8, 9, or 10. Accounts you've paid off in full won't help your FICO Score 9 or 10.

VantageScore 3.0 and 4.0 don't count paid collection accounts, and if you pay off collections, your score could go up. What's the point? Pay all of your bills on time and do other things that are good for your credit score. Even if you pay off a collection account in full, it usually takes time for your credit score to go up.
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