Credit Tip You Probably Didn’t Know

Did you know that if you pay off an old account that is in collections, it will damage your credit even more? You see, when it went into collections the first time it lowered your score. But over time your score would eventually go back up. But, if you pay any money toward that account, even if it's only a dollar, it makes the account current again. So it will knock your credit score again. So that makes two hits on your score for just one account. Does that mean I suggest never paying the debt off? No, not at all. If you do have the money to pay it off, tell the collection agency you will do it under the condition that all negative remarks about the account will be removed from your credit report. And get this in writing!! If you don't get it in writing they will probably leave it on there. It is your job to get it in writing and then double check your credit report to make sure they removed it. Keep in mind credit reports can take up to 30 days to get updated. I can't stress how important it is to get it in writing. Collection agencies will stop at nothing to get money from you. They don't always play by the rules. So you must stay on top of things and get everything in writing. And then check your credit report to make sure. Once you take care of this problem, you are now ready to pursue the purchase of your dream home or refinance!