Valued Contributor
chasmith
Posts: 1,062
Registered: ‎05-26-2010
Re: Pay off BK accounts to improve score?

FIRST, do what makes economic sense.  THEN (and only then) consider how your score is impacted.  So no, don't pay off old lines, use the money for emergency savings or to secure a loan or credit card to build new positive history.  Time is the main ingredient here.  The impact of a major derogatory like IIB fades over time, and removing one of many may not even move your score - aftyer two or three there's little impact to having more with the same date.

 

Understand that your score is a factor in getting credit, but even if you paid off everything and the lines deleted, your score may not improve as much as you would hope, and the Public Record will still be there.  You're very unlikely to get the IIB removed and keep the line so your AAOA will shorten.  Lenders will look at your score, but many, perhaps even most will then see the BK Public Record and deny you anyway.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
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