Paying off collections accounts and tax liens - does that improve my credit score?

[Anonymous]

Hello,

I have a five tax liens and six accounts in collections.  The collections accounts are medical, storage, cable, utility, cell phone, and one I don't recognize.  Will paying off the tax liens and collections accounts help to improve my credit score?

Please advise.  Thank you.

[RobertEG]

Paying the debt that resulted in reporting of delinquencies and derogs along the way is not basis for deletion of that reporting from your credit file.

As for scoring implications, it wont bring any current improvement.  However, in the case of tax liens, they are the one type of adverse information for which the credit report exclusion period does not begin to run from the date of the adverse item itself, but rather from the date of payment of the tax lien.

Thus, payment has begun the running of its 7 yr exlusion period.  Future scoring benefit once it is finally excluded.

[Anonymous]

Hi again RobertEG,

I want to make sure I understand what you are saying.  (I apologize in advance.  I am new to all of this.)

-Paying off the debt that resulted in the reporting of delinquencies and derogs, won't improve my credit score.  If so, what do I do with that debt?

-Once the tax liens are paid off, however, that will eventually improve my score?

[Anonymous]

(My apologies for the blank post.)

Two more questions:

1. What is a seven year exlusion period?
2. Would you be willing to further explain to me what you mean by "payment has begun the running of its seven year exlusion period"?

Thank you so much!