If your credit score doesn’t improve if your pay accounts in collections then why pay at all?
So if you get into a little financial situation when you are young, it will inevitably take at least 7 years to fix no no matter if you pay up or not? What can one do to improve their credit score with bad marks against them?
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3 Responses to “If your credit score doesn’t improve if your pay accounts in collections then why pay at all?”
Comment from bdancer222
Time February 28, 2010 at 4:49 pm
First, the collector could take you to court and win a judgment. This would make you credit even worse. Judgments are good for a long time and can be renewed.
Second, even if the debt is beyond the Statute of Limitations (SOL), the timeframe to bring lawsuit, collectors can continue to call and try to collect.
Third, you OWE the debt. Paying it is the moral thing to do.
Fourth, creditors look at your whole credit report, not just your score. Paid old debt looks better than unpaid. Mortgage lenders won’t approve you till all negatives are settled.
You rebuild your credit by paying all your bills on time. You need at least 24 months of consistent, on-time payment history to improve your score. The older the negatives, the less impact on your score.
Comment from Dan W
Time February 28, 2010 at 5:06 pm
Ask lenders for agreement to delete this items from your credit report when paying them. I recommend to get such agreement thru credit repair agency, for example this one – creditreport.fateback.com
Comment from Missy
Time February 28, 2010 at 3:58 pm
Because the debt can inevitably follow you around for the rest of your life. It will be passed from one collection agency to another. They will call you and harass you and possibly claim a judgment against you, sue you, or garnish your wages for the money you owe.