Should I pay off a medical bill that went to collection that is 2-3 years old?

It is a fine line when paying old collections.... temporarily. Paying old collections is always the best thing to do long-term. An old collection that hasn't reported in a long time will usually be be marked as current but paid on your credit report, bringing the date of last activity to today. Credit scores base a lot of your score on when the negative action occurred. So while a small 5-year old collection is noted, it doesn't hurt a lot to your score if everything else is OK. Paying it off will move it to a current paid collection, which MAY temporarily lower your score. Many creditors are still reporting old collections as current, so paying off anything reporting in the last year WILL improve your score right away.

It's hard to say if your scenario would produce a mortgage approval... you have not provided near enough info.. but in general, paying off an old collection, especially one 3 years old, would more than likely reflect negatively since your taking a 3 year old account, which has little impact on your credit, and making it new or recent... having a collection or a paid collection will produce virtually the exact same credit score.. The fact that the account went to collections is the negative impact reflected in your credit score, whether you paid it or not is trivial.. credit reports are driven by most recent activity... if you have an 800 credit score, but you all of a sudden forget to pay a $20 credit card payment, and your credit report shows you 30 days past due, this one negative trade line can drop your score 80 to 100 points.. so paying off old collections will make them new again, and thus lowering your score... there are a lot of companies out there who do a great job of credit restoration, but do your due diligence... there are a lot of scams out there as well, but you really should hire a pro to help you with your credit.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

IF the collection is over 18 months old AND they are not reporting it each month AND you are looking at going FHA, you should not have to pay it off. However, if the collection agency is updating the report each month, or even every couple of months, the update will actually hurt your score. If this is the case, pay it off. If they haven't updated the collection in the last 18 months, leave it alone. Credit cards where the balance is at or below 10% of the credit limit earn the maximum number of points. The sooner you get your accounts down to this level the faster your score will grow. DO NOT pay them to zero and DO NOT close them. A small balance earns more points than a zero balance does and a recently closed account will deduct points. You should be able to add enough points to have a good enough score to qualify for the best FHA rates within 6 months. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

Don't forget to look at what else is affecting your score. There are probably other things on your report that can be done which may have a greater impact on your score in 6 months. To say resolving the second collection alone will give you a high enough score to get a loan, may not be true.

YOU should consult with a professional regard credit situations. I can refer to you to someone who is nationwide ,and gets results for clients, and will work for about a 1/3 of the costs.. email me at yourloanpartnerforlife@live.com linda

If you can get the collection agency to agree to "remove or delete" the collection at the time you pay off the collection then you should do so. If they will only agree to mark it as "paid in full" then I would just let it be and not pay it off because it will make this account a more recent derogatory account which will probably hurt your credit score. Also, if your Mom and Dad have good credit have them add you as an authorized user to a credit card that they have had for a long time and this will help improve your credit score drastically.

I have been noticing some old collection accounts are starting to report new activity. What was the date of last activity being reported on the account? If it is shows current activity, then I would pay it off. New activity on a collection may decrease your score just a little but if it is actively reporting it monthly as a late then it is hurting you in the long run.

I recommend doing nothing about that last collection and seek out a lender who will spend the time with you reviewing your credit report (tri-merged) and that has access and willing to run CreditXpert and help you with potential score increases through rapid re-score.

Any negative item you can have deleted is definitely a good idea, and I agree with those recommending you not pay it now. However, I recommend you have the funds available to pay it if required by your lender as one of the conditions for final loan approval (when you DO apply). In the long run, paying what you owe is a good idea but it can be counter productive if you are trying to increase your score in the short fun. No lender should try to guess at your prospects with 6 months without seeing your full picture. If you are at 600 now it is certainly possible that your credit could improve another 20-40 points in 6 months to enable you to get a FHA loan (some lenders can work with scores as low as 600), but mortgage approval is based on much more than just your credit score.

If it is from 2010 I would not pay it off.....I would wait until the lender tells you to pay it off, which if you are going with an FHA loan they will probably leave it alone. As long as it is not currently reporting activity on it I wouldn't touch it.

It is likely that your lender may require you to pay off this item upon closing.