If you are reaching the 7 yrs. mark with a debt, is it best to pay it off or let it drop off of your credit?

Answer 1

Paying this now is the worst thing you can do, this will automatically reset the collection statutes back to zero, as if you just ran up the debt today...giving the collection agencies 7 more years to hound you for the full balance. Furthermore this will bring your score down, by changing you debt to income ratios.

Save your money, Let it drop off, your score will get a nice boost shortly thereafter. Good luck.

Answer 2

Both previous answers are sorely incorrect. It is illegal for collection agenices to re-age an account. The seven-year stipulation is for 7 years. Period. No exceptions and nothing can change that: re-selling the debt, paying it off, etc.
It is best to pay that debt. Even though it might fall off your credit report, you are still liable for the debt and the creditor still has the right to try and collect the money you owe. The debt falling off your report does not mean it just disappears.
Good luck!

Answer 3

Let it drop off your credit reports. If you make any payments or pay the debt in full you will restart the 7 year clock and hurt your credit score, because there is new activity.

Answer 4

Let it drop off your credit report. A paid negative is just as bad as an unpaid negative. In fact, paying off old debts hurts your FICO score rather than boost it. Negative accounts have less of an effect over time but if you pay off an old debt, that's renewed activity on your credit report and your FICO score will tank.