Too many people try to fix their own credit and nearly every time they have the same plan. Payoff collections. Now I understand that paying collections may seem like a good idea but it is not a good idea in most cases.
There is a flaw in the scoring system that penalizes consumers who pay off old collections. This is what happens. The scoring system will lower someone's credit score dramatically upon a collection account being placed on the credit. Let's say that John has an unpaid utility bill for $200 at Vectren. Vectren grows frustrated and due to no response from two letters/statements, sends the account to Atlas collections. Atlas will immediately place the account onto the three credit bureaus. John's credit score is lowered by say "65" points for the collection. Collections are one of the worst items to hit a credit report only slightly better than a repo or foreclosure.
As this collection ages (let's say it was placed on John's credit in 2007) it has less impact on the score. Maybe -40 by 2009, -25 by 2010, -15 by 2011. So here we are in 2011 and John wants to get a mortgage. The credit report shows an unpaid collection from 2007 to Atlas collection. The mortgage company wants it paid off. What John may not know is that the negative to his score might be down to -15 points.
In other words.....get expert help!