Community Leader
Epic Contributor
Posts: 26,021
Registered: ‎03-19-2007
Re: Does Paying an Old Charge-Off Help FICO: Yes or No?

From the confusion in what you have read, both here and elsewhere, I think the definitive answer is that there is no definitive answer.


I can opine all I want about what makes or doesnt make sense, or about what the FICO algorithm does with scoring of collections and COs, but absent any specific statement from brother Fair, nothing is definitive.


Being a risk of becoming delinquent analysis, it only makes sense to me that a collection or charge-off should be scored in impact based only on the adverse item that created its reporting.... the DOFD.  Later activity has nothing to do with that issue, and thus should not affect its impact regarding its adverse scoring.

However, others swear that both updating reporting and payment or non-payment have effect. Much of that may be due to overlooking other changes that occured in their report, but the anecdotal posts seem to indicate an effect.


In my opinion, the real benefit lies beyond simple scoring.  The presence of old, unpaid debt is absolutely a negative in any manual review of a consumer's credit report, and even after the adverse item has been excluded from one's CR, it may still be discovered by subsequent creditors via other means.

Looking at the bigger picture, outside of damage to the wallet, it is always better, in my opinion, to be able to answer No, I have no unpaid delinquent debt, regardless if its CR inclusion or exclusion.