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christyrn | Is it better to pay off old debt? |
my husband has some old stuff on his credit report that is now in collections. some of the things are 3 years or more old. is it better to pay these collections off, or will they eventually fall off the credit report? i have heard that paying collection agencies will actually harm your score? thanks!
Additional Details
Thanks to all those who responded with knowledge, not just giving their opnion! Thanks so much! |
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Studly
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clawedlemew is correct....there are way too many people to respond on Yahoo Answers who just do not have a clue what they are talking about, and won't take two minutes to verify their answers first!
Does paying off old collection accounts hurt your credit score? Yes. Here is why.
As debts get older, they do not have as much importance on your credit history. When you pay off a debt that is old, it now turned that status to recent, and it actually can hurt your score rather then help it.
And to answer the other moronic answer....debts will drop off your credit history automatically after 7 years, beginning on the date of the delinquency.
If your debts are only 3-4 years old you have a long way to go, and those debts are probably at their most damaging point timewise.
Why are you considering paying these debts? If you are trying to improve your credit score for the purpose of getting a large loan or mortgage, that's one thing. If it's just the "stigma" if having bad credit, you can improve it in other ways. It will take more time but it can be fixed. Do it by:
1) Disputing debts to the credit bureau
2) Demanding debt validation from the creditors
3) Examine those debts still on your history. Negotiate with the most recent debts first, but do not pay them unless they agree to delete any negative information from your credit history. |
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AL IS ON VACATION AND HAS NO PIC
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Just pay your bills on time from now on. All the old stuff won't matter in another 4 years anyway. |
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msu_milk_chocolate
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Borrowers who try to pay off old delinquencies, charge-offs and collection accounts often learn the hard way: Sometimes, doing the right thing does the wrong thing to your credit.
Quirky credit scoring system
Thanks to the sometimes bizarre quirks of credit scoring, state statutes of limitations and the federal Fair Credit Reporting Act, consumers can't always assume that paying off old debts will improve their financial situation or make them a better risk in lenders' eyes. Add in the tactics of some unethical collection agencies, and you have a real quagmire. |
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clawedlemew
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The first and second answers are correct here.
Yes, you heard right. Paying CA's will almost always harm your score more than help it.
For those of you who don't believe that, do a little research before you shoot the messenger. |
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nuttin'fancy
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They will leave a bad mark on your credit rating if left unpaid.Pay them now and get your credit rating built back up. |
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♥Mizz Al-Abbady♥
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NOOOOOOOO! Pay off each and every debt you have or else they will keep haunting you for years to come and might even gather more interest! Paying off your cards will definately help your credit not harm it, and it will not fall out of your credit report no matter how many years it is on there. |
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mar c
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Yes, start a structured settlement, which would help you;
Structured Settlements Guide: A plan where you get paid periodically over a preset period instead of a lump sum amount is called structured settlement. This method is usually used when you are paid a huge amount like in jackpot lottery or insurance amount |
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May I help You?
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THey never fall off - sorry
Your credit rating will go to such a low amount and your interest rates on all of your credit will go higher and higher.
Eventually many will withhold giving you credit - and you never know when you need it.
So - go back and pay these off
and get ahold of each creditor - and ask them for help and tell them you wish to pay them back and restore your credit.
Ask for help with low payments and all the help they can give you.
GOD bless us always. |
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dianer381
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It's always better to pay off all of your debt no matter the age. It shows your future creditors that you're an honest person and that you take care of your responsibilities.
That's like asking if it's better to pay for all of your groceries or if it's better to steal the stuff you can hide in your bag. It's always better to be honest. |
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pamela d
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oh yes! we had that problem to. they`ll come after you for sure. l use to hate that. but yes try and pay lt off cause you don`t want to give yourselves bad credit otherwise your gonna have a hard time trying to buy a house lf you don`t already have one? this is what lt is with collection agencies they can make your life very miserable. and l would try and see lf you can consolidate all of your bills cause this is another thing me and my husband did. so try lt. and good luck. |
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winds_of_justice
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Don't be silly, of course paying something off couldn't harm your credit score. That'd be like having a rash that won't come off without a cream and deciding to not buy the cream to just let it rest there and simmer. In fact you SHOULD pay off your debt, it won't just fall off the face of the planet :p |
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