I am paying on a old debt on my credit Report will the 7 years really start over?

Question

My credit is 490, 493, 515, people say this is very bad but I only have 2,000 dollars in debt... There are so many people with better scores with a lot more debt.. I have decided to pay on the newest debts and have heard once I bring the balances down it will actually raise my score is that true?

Answer 1

OK, once again people are getting confused by the reporting dates. Let me explain again.

The credit reporting period is 7 years, and begins from the date of the last delinquency. It does NOT get reset if you make a payment, contact the creditor, or is sold to another collection agency. It's 7 years from the delinquency date...PERIOD!

The Statute of Limitations is the timeframe that a creditor has to sue you for a debt. That time begins from the last transaction date. It can be reset if you make a payment or charge to the account. That time period varies from state to state, and averages around 6 years.

Now your next problem. When you pay off a debt, all the creditor is required to do is show "paid" on the credit report. But all of the negative stuff, like charge off's, collections and late payments, will still be there! Unless you get them to DELETE this report, your payments will do nothing to improve your credit score.

If your debt is old (over 5 years) on the credit report, paying on it will turn it into a "recent activity". Your credit score looks at those as much worse then an older debt. As debts age, they do not see them as important, and your credit score actually improves a little bit. But pay this off, and you will actually HURT your score! Unbelievable but true.

So it's advised that if the debt is over 5 years old, and the creditor will not delete the item, don't pay it.

Answer 2

Yes the clock resets to the last transaction. What you can do is request that if paid they get taken off of your report make sure it is in writing. If they are debts that are very old over 3-4 years the statute of limitations have run out and would just let the 7 years expire, unless you wish to wait another 7 years

Answer 3

you are correct. pay the most recent debt first and then pay the older debt last. the way the scores are generated is by current loans being paid on time, the age of the current loans being paid on time, the balance to high credit of the current loan paid on time.

Derogatory items like old collections, bankruptcies, etc. take lesser % of the scores.

To get the very best credit, get some credit and pay on it religiously. It's all about longevity of time.