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To pay or not to pay?

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Anonymous
Not applicable

To pay or not to pay?

My experian is 519. I got two credit cards last year, always paid on time, balance is about 50% of limit. Although last month I paid them down a lot more. Problem is, my score is no higher, I think even lower. When I checked my credit report, I saw a lot of small amount negatives. $10, $11, $12, etc. Then some from $100 to $300. This may be a newbie question, but if I pay these off, will it effect my score? Or does it not matter anymore since they already hurt my score so much?

Message 1 of 10
9 REPLIES 9
LIGHTNIN
Senior Contributor

Re: To pay or not to pay?

Hi and Welcome to the forums,

 

Where did you get your EX score from?  Is it a FICO Score? There are FICO scores and non-FICO's( what we call FAKO's).

Suggest reading  The Son Of Credit Scoring 101. about scores.

 

The negatives on your CR............Are they CA's?  if so, post your questions about them on the Rebuilding Your Credit Board.

Hope this helpsSmiley Wink

FICO's May 2015 EQ764 ~~Live below your means and always keep an emergency fund -Love Everybody ~ Big Kenny ~ Big and Rich ~~~~~Credit Scoring 101 - Common Abbreviations - Freq Req Threads - Free Credit Reports - What Steps Do I Take?DV? PFD?
Message 2 of 10
Anonymous
Not applicable

Re: To pay or not to pay?

Im sorry, but I'm not sure. I went on the experian sight, and purchased the one dollar credit score check. I have no clue what all the little ones are even from, butthe bigger ones are chargeoffs. I will ask there...thank you Smiley Happy

Message 3 of 10
llecs
Moderator Emeritus

Re: To pay or not to pay?

On the question of the score, your Experian score isn't a FICO. It was brought up because your FICO could easily lower or even much higher. Welcome to the forums!

Message 4 of 10
Anonymous
Not applicable

Re: To pay or not to pay?

Thank you! How does one get an accurate FICO score?

 

Message 5 of 10
llecs
Moderator Emeritus

Re: To pay or not to pay?

You can only buy your Equifax FICO from myFICO, your lender, or from Equifax.com (while they offer a FICO in 2-3 products, most of what they push and feature on their site is a FAKO score).

 

You can only buy your TransUnion FICO from myFICO or from your lender.

 

Unfortunately as of a couple years ago, Experian blocked consumer access to your own FICO, though your lender can get it for you.

 

There are some banks and CUs out there that do offer your FICO at a discount or free. Check with your local bank or CU.

Message 6 of 10
RobertEG
Legendary Contributor

Re: To pay or not to pay?

The stock answer whether to pay or not to pay is that it is your decision.

That may seem like a flippant answer, but is not intended as such.  It is against the rules of the site to advise anyone not to pay a legitimate debt.

Thus, advice you receive will be limited to the potential impacts of such a decision.

 

As to the benefits of paying and score improvement, it may have some benefit, depending your situation.

 

What it wont do is improve your score in the category of payment history (derogs), as paying does not remove the fact of reporting and scoring of the derog itself.  It still remains until it is eventually excluded from your CR, either by way of its reaching its statutory exclusion date, or by obtaining earlier deletion by way of a pay-for-delete (PFD) agreement, or a later good-will (GW) deletion.  Those deltions are totally discretionary on the part of the reporting party, so they require some effort.

If deletion is achieved by way of aging of the derog past its CR exclusion date, yes it will be removed from scoring, but the unpaid, delinquent debt still remains in the closet, and may be discovered by potential creditors in the future by other means.  Payment, regardless of pure score impact, removes that skeleton.

 

Unpaid debt, for some accounts, may continue to affect your % utilization, and thus your score.  Paying will remove the balance from that calculation, but once paid, the credit limit may also be removed, and thus it will no longer be scored in the util of credit category.  That net effect varies depending upon your indiv. credit report.  While unpaid, the debt is continuing to grow, so the longer one waits to pay, if they ultimately decide to pay, it costs more.

 

And, finally, lingering in the background is the current statute of limitations (SOL) status of the debt.  If still within SOL, you have the threat of their taking legal action to obatin a court order for its payment.  Such judgments are reportable, and if obtained, are a serious additional scoring ding, not to mention your compliance with the judgment, which typically remains in effect for ten years.

 

Those are some of the main considerations......

 

 

Message 7 of 10
bettercreditguy1
Established Contributor

Re: To pay or not to pay?

I might also add in addition to pay or not, is your decision only. However, forward looking, the more of the unpaid accounts that you pay, the more improved your chances are of getting credit or better terms down the road, unless you wait for all of your charge offs, lates, and baddies to fall off of your reports. Up to ten years is a long time to NOT be able to secure a loan, credit card or other financial instruments.

Updated scores 3/7/21 TU 849, EQ 829, Ex 818 (all Fico scores) Remember the Three P's: Pay early in Full, Pay on Time, Patience
Message 8 of 10
mtrsprt
Frequent Contributor

Re: To pay or not to pay?

With old balances that low, I would pay them all off in a heartbeat.  Clear your mind.  Set yourself square with debt, and just continue with good current and future payment history.

 

Any manual reviewers seeing unpaid debt (ESPECIALLY with such low amounts), will frown upon that. 


Starting Score: 521 TU, 597 EQ, 574 EX on 6/20/2011
Current Score: 753 TU, 764 EQ, 766 EX on 02/17/2014
Goal Score: 720-740 Across the board


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Message 9 of 10
Shogun
Moderator Emeritus

Re: To pay or not to pay?

+1  Pay them, they're small.   See if they will take a PFD offer.   I always advocate paying them just to avoid the bottom feeders that pop up later.   Good luck.

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
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Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Message 10 of 10
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