Does paying off old debts improve your credit score?

Credit Report & Score Guide Forums Credit Repair Forum Does paying off old debts improve your credit score?

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  • #18511
    Ruth D
    Guest

    I have a few badies on my credit report, and my credit score is only slightly above 600. I’d like to start re building my credit score, but what is the best approach?

    Should I pay off my old debts or wait for the SOL? Dose paying of old debts improve your credit score? And just how much?

    #18513
    Jammal
    Guest

    That would depend on what & how you pay

    Paying off old debts is tricky because in can sometimes backfire and actually lower your credit score! Crazy but true.

    When you pay off old debts and the creditor report it to the CRAs, in some cases the account may appear to be younger. That causes your credit score to drop because credit score are date oriented. The younger the account – the greater adverse affect it has.

    You need to pay off your debts, that’s for sure. Just don’t get your hopes too high about your score…

    #18520
    Gus
    Guest

    Don’t confuse SOL with credit reports and scores

    Statute Of Limitations has nothing to do with credit reports or credit scores.

    It’s a common misconception. Debts do not fall off credit report after the SOL, and credit score do not care about SOL.

    When a debt is timed bared (i.e. passed its SOL) – that means that the creditor cannot sue you anymore for that debt, and if he does than you only need to show up in court and say that the SOL has passed.

    Credit reports and score do not care about SOL. They DO care about credit report time limit, which is 7 yrs for most debts.

    #18523
    Martha
    Guest

    How old are the debts?

    You need to pay off the debts, but if they are near the 7 year reporting time limit it’s better to wait a few months for them to fall off your credit report and then pay them off. That way you don’t risk the account appearing younger, and your score won’t take a hit (it won’t improve either, though). Check out this post for more information.

    #21141
    MichelleDwurff
    Participant

    Hi any news on your credit score? did paying off old debts improve it? trying to figure out how to improve mine.

    #21987
    007creditagent
    Participant

    Hey Ruth,

    Just paying off old debts that have gone to collections will not improve your credit score. Negative marks can remain on your credit reports for seven years.

    Fico Scores range between 300 and 850, with scores over 700 being considered respectable scores, score below 660 would find it difficult to get approved for even small credit cards.

    WHAT MAKES UP YOUR CREDIT SCORE?
    1. Simply pay your bills on time and do not be more than 30 days late on any bill.

    2. If you do foreseeing yourself being late on a bill, you are better off notifying the creditor in advance as some installment loans might allow a special 30-day forbearance without any adverse effect on your credit.

    3. A recent late payment affects your credit more adversely than an older one, so do not be surprised to see a drop of 60 odd points on a new late.





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