Debt is 2 years or older and on credit report?

Question

Issue:

If you have something on your credit report that is 2 years or older, do you pay it back?

I have heard two sides of the story.

Story 1: If it is two years or older and you pay it, it hurts your credit more than it helps.

Story 2: If you pay it off it'll help your credit instead of hurting it.

Which one is true? Cause if story 1 is true then 90% of the debt I owe can just be "written off" and I can start in a few months by getting a secured credit card and I can only go up from there.

I don't want to hear from anyone about how I "should" pay all my debt off.

What I really only want to know.....if a lender looks at my credit and everything on there is over 2 years old how much will said lender care about that debt?

Answer 1

It is true that lenders give more weight to your last 2 years of credit history. However, any negative item will remain on your record for 7 years.

In short pay off the debt rather than let it sit on there. This is because even though creditors give more weight to the previous 2 years any unpaid debt will hurt your credit more.

Answer 2

The short answer is that yes, the lender will care about the 2 year old debts. The actuality is that most lenders won't see the individual items on the report though. Most lending is done based on a person's credit score. (Banks typically use an automated system in deciding on whether to grant loans.) The credit score is derived from many different factors such as how long you've used credit, what was the highest balance you owed, were you late on payments, did you default on a loan, etc. They also look at your ability to pay - that is to say do you make enough income to pay the new debt as well as your existing debt and life expenses (rent, food, etc.).

Answer 3

It will be on there 7 (SEVEN) years.

And a "paid off" debt looks better than one that is unpaid.

Perhaps you could call and ask what they would settle for?
You did not mention what the debt was for? Is is all yours?
Will they accept payments toward the debt - with no interest?

You have 5 more years of grief - unless you act responsibly.

Answer 4

Any type of debt is held on your credit reference for 6 years. After that time it then falls off. That debt is never shown again after 6 years as lasped.