Does Paying Off Collections Accounts Improve Your Credit Score?
Having a poor credit score can make it difficult to qualify for loans, mortgages, and other forms of credit. One way to potentially improve your credit score is by paying off collections accounts. But does this really work?
Paying off collections accounts won’t necessarily raise your credit score; however, it can reduce the amount of negative information on your report. If you have multiple collections accounts, and pay them off one at a time, you may see an improvement in your score over time as each account is resolved. Keep in mind that collection agencies will often negotiate payment amounts so you may be able to settle the debt for less than what’s owed while still improving your credit standing.
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