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I Paid Off an Old Debt and My Credit Score Went Down. – Michelle


“Dear Steve,

To pay or Not to pay…. that is the question.

Have a old debt (over 2 years old) I have been told not to pay it because if I do it will make a negative mark on my credit. I know this is true because I paid off something else which was in collection, it now says Paid, but brought my score down by 4 points. 4 points is alot when your score is already low. Now I’m afraid to pay off the other debt because it might lower my score more. On the other hand, I would like to pay it off. What’s the best solution that would INCREASE my credit score or at least not lower it more.


Dear Michelle,

I don’t know who told you that but they are wrong.

There are a number of reasons why your score can fluctuate and 4 points is nothing. Each bureau uses their own scoring model, the formulas change and as time passes, and things get weighed differently.

Rather than guess why your score is what it is, you need to order a copy of your consolidated credit report with credit score. It will show you what each of the credit bureaus are calculating for your score and tell you what you can specifically do to improve your credit score.

When I look at my own credit score they range 17 points between credit report bureaus. And my score changes a bit every month.

What I am more worried about is if you have a current good line of credit that is reporting to the credit bureaus. You will be able to confirm this when you get your consolidated 3-1 credit report. If you do not have an active credit card, not store card, that is reporting to the credit bureaus, your score will drift down.

You see your credit report has bad credit on it and if it ends on a bad credit note it is like being in school and getting a D on a test. Unless you get better grades after that it will not pull up your overall grade.

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If you don’t currently have a major credit card I suggest that you consider a secured Visa or MasterCard that will report to the credit bureaus. That will do the trick to start bringing you back up. And the other thing that will help, pay off any open collection accounts.


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.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

1 Comment

  • Damon, you are supposed to be the expert but telling her to pay off the old debt is NOT good advice. As soon as she pays it, the seven year time period that it stays on her credit will start over. So if it’s two years old, she has five years left before it drops off UNLESS new activity is recorded (like a payment.) Paying zombie debt is never a good idea!

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