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Pay off BK accounts to improve score?


Pay off BK accounts to improve score?

I was advised by a TransUnion rep that credit scores are connected to how many accounts were included in BK. My financial situation has improved since BK and am thinking about paying off a couple of credit cards with low amounts ( $550 and $1300) that were IIB. Does anyone have any experience going back to a creditor after BK and paying off the account? How did that help you?



Message 1 of 9
Regular Contributor

Re: Pay off BK accounts to improve score?

why on earth you want to do that? your accounts should be zero balance anyway with the bk and say included in bk.  first two years post bk is the hardest and only time will get your scores up.  i am 26 months post bk and my scores is ex 719 eq 698 and tu 707.  you can fet the same scores just dont applied for too credit all you need is at the most two major cc and one store card and the rest is just time. just save your money and you will be just fine. 

Message 2 of 9
Moderator Emeritus

Re: Pay off BK accounts to improve score?

Unfortunately, in this day and age (unlike years ago) there are some legal issues with paying off accounts that were previously discharged through BK.

Last I checked into this, they can revisit some aspects of the account and/or agreements and you may become liable for significant late fees or other fees.

Check with your attorney on the legal ramifications.

Just puttin' syrup on something, don't make it pancakes.
Message 3 of 9
Valued Contributor

Re: Pay off BK accounts to improve score?

I offered a pfd for a couple of medicall CA that were IIB.  They refused to take any money.  But a couple were nice enough to just delete.  I think what beamMEup said sounds right.  There are issues involved with trying to pay a legally discharged debt.  Technically, there is no debt.  The amount was written off by the company (tax implications), and possibly some of the prior agreements could be reinstated.


In my letters I kind of just threw out that that while I was no longer obligated to pay this debt and that I understood hte OC/CA may not be able to accept payment when no payment is due that I would nonetheless like to sastify the account or something along those lines.  I would offer the amount that was owed or ask for a gw deletion.  Got a few gw's but not one pfd on any IIB account.  That also went for some IIB credit cards. 

CH 7 Filed 7/27/15 Discharged 11/16/15
Starting Score: EQ 620 TU 568 EX 593
Current Score (07/13/16): EQ 674 TU 649 EX 674 (FICO's 08)
Cap1 QS ($5350) (Combined QS and QS1) Discover It ($4100) MilStar ($8,600) Fingerhut ($800)
Off to the garden 05/01/16
Message 4 of 9

Re: Pay off BK accounts to improve score?

My BK attorney advised me if I wanted to pay the accounts after BK I was free to do that. He didn't advise me how it would affect my credit.


I might try offering to pay a credit card IIB that was a small amount and see what happens. It sounds like there's a possibiity by an earlier post it could drop off.

Message 5 of 9
Frequent Contributor

Re: Pay off BK accounts to improve score?

the damage has been done at this point and I think you will have nothing to gain from paying these discharged lines.


Buy some stock or something else that will give you a return on that money.

Message 6 of 9

Re: Pay off BK accounts to improve score?

Good suggestion! You're probably right.

Message 7 of 9
Valued Contributor

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
Take the FICO Fitness Challenge
Message 8 of 9

Re: Pay off BK accounts to improve score?

so if I understand this correctly if I am able to remove some accounts that show IIB my score would improve?  I am working to write GW letters to these creditors in hopes of a deletion.  My AAoA shouldn't fall drastically, I carried all of my student loans through Ch7 and oldest account is 10+ years

Starting Score: 533 (BK Ch7 discharge 8/2011
Current Score: 640
Goal Score: 680

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Message 9 of 9