This is a common question about Paying collections that I get a lot.
“Ryan, why have I heard that if you are paying collections it lowers my credit score?”
Here’s the technical reason: a collection in charge off has a certain coding on the credit report and that coding tells the algorithm we’ve got something bad here. In order to determine how bad it is; how much it’s hurting you; they look at the date of last activity.
Oftentimes the more recent that date of last activity the more hurts the score. The date of last activity gets reset by paying collections monthly. So be very cautious when you go about paying collections. I’m not saying don’t pay your bills.
Just make sure you go through the proper debt validation debt verification process and always request a letter of deletion upon payment or settlement.
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