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verynice23

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If I pay off a derogatory mark such as something in collections does it increase my credit score?
I wanted to try a simulation but there is not option for that.

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It will have very little, if any, effect on your score. A paid collection is still a derogatory remark. There are other reasons to pay collections besides improving your score, though.  Opening new trade lines is more difficult, and if you do manage to get a new credit card it will have a low limit. If you expect to be looking for a new place to live soon it can cause you trouble there too. If you rent, many property management companies won't rent to anyone with an open collection, and any closed collection needs to be at least two years old (so there's you incentive to make it a closed collection ASAP). As for securing a mortgage with an open collection, probably not.
The amount owed on your collection account is also included in your total debt. If you pay the collection your total debt will decrease, and THAT is why your score may improve slightly if it's paid.

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A bit more on collections

Paying them will improve Vantage Scores and FICO 9; it is irrelevant to all other FICO models and unfortunately can be a negative.  Generally speaking, you want them not only paid, but you want them off; however, as Krissie correctly states there's more to getting anything underwritten besides a score and to an underwriter a paid collection always, always looks better than an unpaid one.

When we're talking mortgage, don't pay off the collection unless the LO mandates it, and do it as a function of closing... namely, after the credit pulls are done.  It's stupid and awkward and for the life of me I don't know why the algorithm does this but an update on the activity line can cause collections to be -reaged and that definitely applies to the models 99.99% of the mortgages in the US are underwritten on.

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