How Does Paying Off Old Debt Affect My Credit?

Did you know that by paying a collection you are:

  1. Admitting fault and accepting the debt, therefore validating the account
  2. Lowering your score in the short term as the date of last activity is updated making the account look recent
  3. Updating the account to a paid collection, therefore the account will still show on your credit

Unless an agreement has been made with the collection company, and written proof is provided that they will request for it to be deleted from the three credit bureaus, the credit bureaus will only update unpaid collections to show paid. When this change is made the date of last activity on the account is updated therefore making your account look recent and the collection will still report on your credit. Since close to 35% of your credit score comes from  payment history and recent negative marks have more an effect on your credit score, your credit score may be temporarily lowered.


MSI NEW LOGOMSI Credit Solutions provides superior credit restoration and comprehensive consulting services that are reliable and affordable. For any questions or to schedule a free credit consultation, contact us at (866) 217-9841.


 *The information in this article has been provided strictly for educational purposes.




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