Old credit balances

[Anonymous]

I have had my troubled youth, and trying to get back on track.  I have some old outstanding balances that were never paid totalling $1750.  These are from 2000 / 2002.  I understand that paying them off isn't going to remove them from my score.  These will be dropping off this year, and 2009 whether they are paid or not.  I live in CA, and from what I have heard there is a statute of limitations that a debtor has that they can take legal action to collect a debt.

So the big question, should I pay these, or let them lie and wait.

[Anonymous]

It's really up to you.

However, if you have a credit card with a $1750 balance -- and it hasn't been sold, then it still counts on your total utilization. The limit is effectively zero, so your utilization is infinite.

Let's say you also had a credit card with a limit of $2000 and a balance of zero. On that card, you'd have a utilization of 0%.

However, your overall utilization = ($1750 + $0) / ($0 + $2000) = 87.5%

In other words, even though paying off an amount owing doesn't generally help increase your score, paying off charged off revolving accounts may help.