Will paying old debt help or hurt credit score?
Wow. Lots of conflicting stories here and incorrect information. Here goes: If you start making payments and then GO LATE AGAIN, then it will restart your 7 year reporting period. However, if you start making payments and are NEVER late again, then the START of the LAST time you had a late payment is the start of the 7 years (it’s actually 7 years 150 days.) If you should pay it off or not, is up to you. If you can get the company who charged the debt off to accept a payment on it, then they MUST take it out of ‘charge off’ status and just show it as having been late. If you can’t get them to agree to that, then paying a collection company that now owns the debt wont help you with THAT charge off. It will show a balance of $0 on the collection account which will SLIGHTLY improve your credit score, but not by a lot. The 7 year period does NOT relate to them being paid off, it relates to LATE payments and DELINQUENT accounts.
