Credit Report Scoring System
2010
How will paying off old collection accounts affect my credit score under the new FICO system?
I have recently run my credit report and found two open collection accounts from 2005 totaling just over $1,000. In researching them, they do appear to be legitimate. I feel morally obligated to pay them, but have been reading that doing so will hurt your credit score. Is this true?
Items stay on your credit report for 7 years. Paying an old debt can reset your legal statute of limitations, however, it does not reset/re-age the reporting SOL.
Read this article: http://articles.moneycentral.msn.com/Banking/YourCreditRating/WhenPayingBillsCanHurtYourCredit.aspx?page=1 It explains well the pros and cons of settling old debts during the statute of limitations.
I admire you for wanting to settle your accounts.
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