Increase Your Credit and Lower Your Mortgage Payments

I am an expert in mortgage lending and credit.  I am here to teach you tips on how to help your credit in order to qualify for better loans with lower interest rates. 

Today’s question is:  Does paying off my collections increase my credit score? 

The answer is: NO, absolutely not.  It acutally hurts your score because when you pay it off, it now shows as being a recent late on your credit report.  The solution is: to negotiate a letter of deletion prior to paying of the collection. 

Example: My sister paid off her collection prior to applying for law school loans and was denied because her score actually went down.  I then stepped in and hired a credit company to help with this mistake.  After several calls with the company, which recorded the collection, we were able to get them to agree to delete this.  However, we did give up our tool for persuading them to delete the derogatory mark by paying it off first.

Please email me any questions to LauraLoans@verizon.net.