Paying off old debt helps a credit report

There may be some consumers that have outstanding debts of small amounts that are in collection, and some of them could be from several years ago. But just because these debts are small and old doesn’t mean they’re not doing damage to a consumer’s credit score.

The question some consumers may have is whether paying them off will restart the seven-year period for which they will appear on a credit report. Fortunately, according to a report from television station WPTV in West Palm Beach, that is not the case. The Fair Credit Reporting Act says that most negative items must be removed from a person’s credit report seven years after the first date of uninterrupted delinquency. Therefore, making payments on the account, or paying it off entirely, does not affect the time the item can be reported on a credit report.

A report from PBS said that paying off old debts almost always improves a person’s credit score. Of course, if the payments are made late, they have already had a considerable negative impact on the score.