3 Reasons Why You Should Not Pay Your Debt

Paying off an old collection or charge off will increase your credit score.
This is a huge MYTH!

Effects of Paying
When you pay an older collection account or charge-off account, your credit score most likely will suffer.
Think twice before paying off an old collection or charge off. By paying your debt, it renews the date of last activity. The collection company or creditors can now report the account for another 7 years.

Everyone knows debt collections are bad for your credit score. Any past due accounts including debt collections have negative effects. These accounts report on your credit report for up to7 years. As accounts age, they have less and less impact on your credit score.

Many consumers believe by paying off collections or charge-off accounts, that it will raise their credit scores. It certainly seems logical; however it is far from the truth. If you are concerned about your credit score, paying off debts prior to obtaining any other type of loan or mortgage can greatly hurt your credit score.
Ultimately, if it is an older account when paid off (or payments are made on the account), by doing so can be devastating to ones credit score. The recent activity of any derogatory item has a big impact on how it effects your overall credit score.

Is the Debt Still Valid?
After a certain period of inactivity on an account, a debt becomes time-barred and debt collectors can no longer sue you for it. This period is known as “the statute of limitations on debt” and varies by state. If the statute of limitations has passed, it is illegal for a debt collector or creditor to sue you.

You need to be careful in communicating with a debt collector because the debt statute of limitations can easily be restarted by acknowledging that you owe the debt, making a payment, entering a payment plan, making an agreement to pay or making a charge on the account.

After 7 Years
Collection and charge-off accounts should only remain on your credit report for 7 years. It is important to check your credit reports as the credit bureaus often continue reporting these derogatory accounts over the 7 year limit.

If you have any questions regarding collection accounts on your credit reports, call our office today for your complimentary credit consultation. We look forward to hearing from you. 480-502-5554

LEGAL DISCLAIMER: The advice provided is for informational purposes only. It is not to be construed as Legal Counsel or Legal Advice.
Video Rating: / 5

3 Easy Ways To Apply – http://loans.mfcu.ru/loans *

If you run out of money but don’t want to waste savings that you have for your education or travelling, short term loans may come handy. There is no need to collect a pile of documents, ask your boss for promotion, sell valuable assets or pledge your car as collateral.
This video found on such keywords:
cash advance burton mi, instant cash loan columbia sc, short term loans austin tx, same day loans no employment, best cash advance Oklahoma City Oklahoma, kappa credit, cash advance in California Moreno Valley, cash advance cedar bluff knoxville tn, good cash loan sites, get cash for your old phone, personal loans and lending tree, cash advance loans el paso, cash loans in okc ok, ada cash loans, indian tribe online loans, secured loans ccjs, best installment loan rates, fast cash income, personal credit history, fast way to get money, Seattle Washinton cash advance, aa personal loans, cash loans down under, lending options, halifax personal loans calculator, installment loans with fair credit, option one loan, cash advance niles mi, same day loans with no broker fees, online cash loans with no credit checks, unsecured loans after iva, cash advance de fonds, best check advance, personal loan places in troy al, bond loans online, newcastle permanent personal loans calculator, mr quick loan hours, short term loans wichita ks, best cash advance Toledo OH, cash time loan tucson az, guaranteed rv loan, lending interest rates, cash advance in apopka fl, personal loan companies in san antonio texas, details about personal loans, bbva compass personal loan application, best cash advance in Chicago
Video Rating: / 5