Paying Off Collections Boosted My Credit Score!

In my teenage years, I obtained a Capital One credit card and a Verizon Wireless phone contract. Both ended up being written off to collection agencies due to my inability to pay for them. Paying Off Collections Boosted My Credit Score!At that time, I did not care about my credit score. Both debts were in the low hundreds, so I figured it wouldn’t be a big deal in the future. I believe that both were bouncing between different agencies for 5 years. Fast forward to today, I’m planning on financing my first car. And my credit report plays a huge factor in whether or not I can get a deal., specifically a deal with low interest rates.
Having any collection on your report can significantly decrease your odds of being approved. Before paying off my collections, I applied multiple times at big banks for an auto loan. And I was denied every time. I’m sure that the collections played a significant role.
So I decided to just pay off the two collections hoping that might help get my approved when going into a dealership. First I paid off my Verizon Wireless debt and a couple weeks later I paid off my Capital One credit card debt.
My Equifax and TransUnion scores went up by 27  points after paying off the Verizon Wireless debt.
Equifax 570 Credit Report
My Equifax and TransUnion scores went up by 64-65  points after paying off the Captial One credit card debt.
Equifax 635 Credit Report
 
My FICO Score 8 number was not affected at all. FICO Score 8 is what banks typically use for personal and auto loans.
FICO 8 Credit Report
I can now apply for certain lines of credit that use Equifax and TransUnion. But I’ll need to do some work on my FICO Score 8 if I’m going to get a good auto loan.

Support Analytical Millennial

If you have enjoyed or found anything useful in this post, I would appreciate it if you used one of these ways to support the blog.

  • Use my Amazon Affiliate Link on your next purchase.
  • Use my promo codes for any apps/programs that I review.
  • Leave a comment to let me know that I have active readers.

]]>

 

Isaiah

 

Leave a Reply

Your email address will not be published. Required fields are marked *