Does your credit improve if all of your debt is in collections and you pay it off?
If I settle all of my debts, which are about 11 different items, will my score go up or do I have to wait 7 years for it to be cleared? If the score will not go up by paying off those collections, how do I get it to go up?
Heck No….That’s the point. The credit reporting agencies are paid off by the banks to make money for THEM. They scare you into keeping your score high and scare you with bad credit horror stories if your score is low; they win both ways. Even if you clear it up you’ll still have the items on paper for 10 years so if you apply for a loan in the future you are at risk to a scam. If you have a 700 score with a repo from 8 years ago they will quickly point it out and slap you with a %14.99 rate.
August 26th, 2010 at 4:37 pmyes it does by alot.
August 26th, 2010 at 4:37 pmPaying it off will help but you will still have the history of the delinquencies on your record and so it will take a while for your credit to improve
August 26th, 2010 at 4:37 pmPaying off derogatory items will not improve your score. The damage is already done and will remain for the balance of the 7 year reporting period whether paid or not. As the item gets older, it has less impact on your score.
However, creditors look at more than just your score. They look at your whole credit report. Paid old debt always looks better than unpaid.
You improve your score by paying all your bills on time. If you don’t have an open credit card account, try getting a secured credit card (you pay a deposit which is held as collateral against the credit line). Use the credit card for small purchases and pay in full every month. You need at least 24 months of consistent, on-time payment history to see your score improve.
August 26th, 2010 at 4:37 pm