topic Re: Paying off debt and FICO Score in Understanding FICO® Scoring

Paying off debt and FICO Score

alysmom24 — Thu, 10 Jan 2013 00:11:38 GMT

Hello all!

I was just wondering if you could help me with some questions I have.

1. I have 3 small collections on my account, one for 198.00 from 08/2008, 201.00 from 08/2006 and 83.00 from 12/2006. I have already called all three collection agencies to ask for a pay for delete and they all said no. If I pay these in full... will this have a negative impact on my credit score since they are so old? I have read about when it updates the last activity month/year, this could happen?

2. If I have some late payments from 2006-2007 range... is it worth trying to send goodwill letters since I have been on time for the last 5 years with these creditors, or will this affect my score at all?

Thanks

Re: Paying off debt and FICO Score

JM-AM — Wed, 09 Jan 2013 20:56:38 GMT

Are you looking to buy something that you need to apply for new credit?

Are you just concerned about the score factor?

Are you just hoping it may increase your score?

Were the collections medical or something else?

What are your FICO scores now?

Paying off debt is always the right thing to do, but its not something we all do.

The reasons why you may pay off a debt varies, and if you should or shouldn't pay it off now or in the future depends on what you are trying to accomplish.

As far as the late payments from back then if they are 30 and 60 day lates they are not impacting your score at all. If they are 90 and 120+ days late they can impact your scores for the 7 year time frame. So if only 30-60 day lates I wouldnt bother in my opinion, if 90-120+ days I would attempt it.

Re: Paying off debt and FICO Score

pizzadude — Wed, 09 Jan 2013 21:01:18 GMT

JM-AM wrote:

As far as the late payments from back then if they are 30 and 60 day lates they are not impacting your score at all. If they are 90 and 120+ days late they can impact your scores for the 7 year time frame. So if only 30-60 day lates I wouldnt bother in my opinion, if 90-120+ days I would attempt it.

I would still pursue goodwill removal of lates even if they are only 30~day. The impact of late payments does diminish over time, but 30 and 60 day lates can still hurt your FICO score even if they are more than a few years old.