If you pay a debt on your credit report?

Deal Score0

Does it improve your score?

* please answer, only if you know – don’t just copy and paste something from About.com.
Thanks!

4 Comments
  1. Reply
    Ryan M
    July 21, 2011 at 1:59 am

    Depends on the amount of the debt. If you make a GIANT lump payment on a credit card, then yes it does. If you are making the last installment payment of $ 300 on a car loan, then no it does not. Your credit score is NOT a reflection of how much debt you have…it is a reflection on how you MANAGE that debt. Missing one or two payments will kill your credit quicker than paying off a $ 5000 credit card debt in one payment will help it.

  2. Reply
    golferwhoworks
    July 21, 2011 at 2:07 am

    it depends on where in the report it is reporting. If a trade line then yes the score goes up. If it is a collection then the score will go down possibly but rebound in a month or 2. If it is a judgment then no change in scores at all just report paid judgment
    I am a mortgage banker in TN

  3. Reply
    bdancer222
    July 21, 2011 at 2:09 am

    Paying off derogatory items on your credit report does not improve you score. The damage is done and will remain for the balance of the 7 year reporting period.

    Paying old debt can actually lower your score. The older the item, the less impact on your score. When you pay off old debt, the transaction is current and counts more in your score, including the negative stuff.

    Keep in mind that creditors look at your whole credit report, not just the score. Paid old debt always looks better.

  4. Reply
    Clay
    July 21, 2011 at 2:25 am

    You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments – buildcredit.ifastnet.com

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