Paying off old debt

[Mimi]

I have a 2-years old debt to DirecTV that went to collections. They’re willing to settle for $300 out of the original ~$500 I owe.

I’m working on improving my credit, so my question is: will paying them off improve my score at all?

[Melinda]

Not Really
Paying off old debts does nothing to improve your credit score. It does however look much better to new creditors that you don’t have any outstanding delinquent accounts with balance on your report.

The only way you CAN improve your credit score is with a Pay-For-Delete agreement, but these are hard to get, and you’ll probably need to pay the debt in full.

Never the less, you should pay off your debt. Here’s why.

[Author]

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