Why Paid Collections can LOWER your Credit Score


This is a common question that I get a lot about Paying Collection-

“Ryan, why have I heard that if you are paying collection it lowers my credit score?”  

Here’s the technical reason behind paying collection lowering the credit score: a collection in charge of 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 the last activity. 

Oftentimes the more recent the date of the last activity the more hurts the score.  The date of the last activity gets reset by you making a payment.  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. 


Question: If you are paying collection can it can lower your credit score?

That is actually true.

It could reset the date of the last activity, essentially waking a sleeping dog.

You need to take a specific action:

Make sure you send a debt validation or debt verification letter to the collection agency to ensure that they’re still holding that debt.

Often, debts get sold or transferred from one company to the next and we don’t even know who’s who is owed.

We don’t know if the original company is holding the debt so don’t skip this step.

You can get the letter in the ‘Disputing Items For Removal‘ section on the bottom of this page.

As Always… In case you haven’t yet, here’s how you get started.

Step 1:

Tap or click here to get your $1 credit report.

We’ll need it to do your credit analysis.

Note: This is for a $1 seven-day trial.

You can cancel it in the first seven days if you want, but we need this as a first step, in order to help you.

Step 2:

You will get a login and password for IdentityIQ when you set up your $1 trial.

Go to this page on TheCreditMovement.com.

Share your username/password for IdentityIQ in the form on the page.

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