Should I Try to Pay Off Old Debt?

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Editor’s note: This is a guest post from

The process can be frustrating – but it’s worth it in the end

Lots of people have questions regarding credit scores – and few people really understand how this all-important number is calculated or how it works.

One of the most commonly asked questions is this: Will paying off an old or bad debt raise your credit score?

When you have a charge off or a negative mark on your credit report, it will remain them for seven years. This means that when you pay a debt in full, the mark will not be removed from your credit report. This is incredibly frustrating when you are trying to clean up your report.

But just because it is frustrating doesn’t mean you shouldn’t try to pay off your debts. It’s better that you do pay them in full whenever possible. Potential creditors will want to see that for the debts listed on your credit report, there is “paid in full” next to the charge off or negative mark. It shows you took responsibility for the debt.

But what if you can’t pay the debt in full? You may need to negotiate a settlement with the creditor. If you do so, your credit report will reflect this and, although it won’t change your credit score as much as paying the debt in full, it will have a positive effect. When paying off your old debts, it is best to pay them off one at a time. If you try to spread the payments out, putting a little toward each debt, you may find that your creditors will start chasing you for full payment. It really is best to pay one then focus on getting the next one paid. You should be sure that each time you pay off a debt, you contact the creditor and make sure the creditor contacts the credit agencies as soon as possible to report the repayment. It is important to note that as you work on repaying your old debt, potential creditors will take note of your more recent activity than your past handling of debt.

How do you go about paying off your old debt? First of all, you should get a copy of your credit report. Look at each old debt, and start with the one you can afford to repay. Contact this creditor only when you are ready to repay the debt. Once you’ve paid that debt, move on to the next one. You may find that the process doesn’t go as quickly as you’d like, especially if you must save up money to repay each debt, but bear in mind that the outcome is worth the time it takes – and your repaired credit history and improved credit score will reflect that.

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