Things To Know About Paying Old Debts
Your credit score builds momentum from
your more recent history rather than the past credit history. If
there
were some debts that went to collections in the past years, although negative,
will not bring your
score down as much as a recent collection account.
Therefore,
if you were to pay down, pay off, or even acknowledge those old
collections accounts, you will
make that account recent. So recent in fact
that it may now be reported for another 7 years.
Don't let this development
excite you just yet. Taking responsibility for your debt is still the
right thing to
do. And if you are applying for a mortgage, all collection
accounts usually must be paid prior to being
approved. In some cases,
really old collection accounts may not.
This information is just something
to consider when weighing your best interest regarding your credit
score.
Remember that collections fall off your credit report after 7 years. So
in certain situations it may be
worth it to save your money and pay off
more recent debts.
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