Back in my college days, I racked up a few collections items, $400 from Target, $800 from Dell, $700 from AT&T, and now that they are 4 years old, I'm wondering if it's worth it to pay them off.
I'm 23 years old, have a mortgage for $157500, one car loan with a balance of $13000, one Bank of America credit card with a $3000 balance (I pay $200 a month on this) but my credit limit is $19,000, one American Express credit card that I pay in full every month but it has a $20,000 credit limit and two federal student loans totalling $17000. The last 24 months on my credit reports are flawless but the things from the past still bug me.
When I purchased my home I paid off a bank of america credit card that had gone in collections and also a collections account from an eviction from 5 years ago. I do have a few baddies so my credit scores are in the mid to high 600's.
Like I said in the beginning, I'm wondering if it's worth to pay them off. I've heard before that paying things from the past (4-7 years before), really doesn't improve one's credit score, so I just want to know what other people have heard. Also, I'm not looking into buying a home, getting a credit card, or a car loan, but it would be nice to be in the 700 club. I'm thinking that at my stage, all I can do is have time pass me by to have my credit scores increase.
Any thoughts???
Maria
