Should I Bother to Payoff Old Debt to Improve My Credit Score? – Kristen

“Dear Steve,

I have recently started to pay down some of my old debts, but have become somewhat skeptical of how effective this tactic is in regards to improving my credit score. I have heard a wide variety of things from different people.

My question is, if the accounts are already in collections and they are old, should they still be paid off or do they fall off in 7-10 years? I have also heard that paying off these old debts creates a new activation date for the debt and therefore reduces your score because it refreshes it’s existence. Is this true? What should I do with old debts that have been in collections?

Thanks so much for your help!


Dear Kristen,

A bad debt can only be reported for 7.5 years from the date it was first reported delinquent, not for the date of last activity. Now that doesn’t mean that some crafty collection company might want to try and report it as a new debt to restart the clock but that’s an easy issue to fix by getting a copy of your consolidated credit report and disputing the erroneously listed debt with each of the credit bureaus that might list it.

I think that now, more than ever, it is important to close the door on old debts by either paying them, settling them or going bankrupt to close the door on them. I’m hearing more and more cases of people having old debts resurface for collection years latter. And I think I’m safe in assuming that your goal here is to put all that old stuff to bed so you don’t need to worry about it any more.

Improving your credit is actually a two stage process. One is to end the old bad stuff, the second part is to get back into the game and get new credit reported that is good. If you don’t have a current credit card then consider getting a secured card that will report to all three credit reporting agencies. If you follow this plan your credit will begin to take off in a good way.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

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