Many consumers believe that paying off collections is the best way to improve their credit when in reality paying off collection will almost always HURT your credit scores. When you pay a collection or make a payment on a collection you update the Statue of Limitations or SOL. The SOL determines the amount of time a creditor or collection company can attempt to collection a debt. When a payment is made on a collection account the Date of Last Activity is updated to the date the payment was made. Which could potentially drop your scores because it will look like a recent debt. Also, paying the collection doesn’t change the status of the account, meaning it still shows up as a negative on your credit report.
PAYING COLLECTIONS DOESN’T REMOVE THE ITEM FROM YOUR CREDIT REPORT!
BEFORE YOU DECIDE TO SPEND YOUR REFUND MONEY ON OLD DEBT, PLEASE GIVE US A CALL FIRST! WE CAN HELP SAVE YOU HUNDREDS IF NOT THOUSANDS AND IMPROVE YOUR CREDIT SCORES AT THE SAME TIME!