Does it help your FICO score to pay of old (4or 5 years) accounts appearing as items on your credit report?
I have been able to get a credit card with a $300.00 limit and have had it as an active account for 5 months. I still want to improve my FICO score.
Public Comments
- It always helps to pay off old accounts which are still showing open, but make sure that current accounts are paid up as that is more important to help increase your FICO scores.
- There is more than one answer here. Yes, your score will be better for a paid collection account than for an unpaid collection account. No, your score will suffer for a current collection account vs. a 4 - 5 year old collection account. Paying a collection account reages the account by updating the last activity date. This is the date that measures whether the debt is within or beyond the debt statute of limitations. This is also the date that measures when the account will fall off your report (7 years). A collection account falls off in 7 years, paid or not. Deciding what to do will also depend on your future financial goals. When and what do you want to use your credit for? If you want a mortgage, you will probably have to pay off open collections if there are any. Your score may be better before you touch the accounts, and will most certainly be better once they have fallen off.
- Keep that credit card for at least 1 year, do not ever be late on a payment. You should be able to "up" your credit after awhile or you could consider having a co applicant to sign with you. The credit score goes on your credit and helps build your credit. Just make sure your co applicant has good credit and is willing to take on the responsibility of paying your bill if you can't or unable to.
- It's good to have open tradelines that have a good history. You can pay them off, but don't close all of them. If possible, don't use more than 30% of your credit limit. Because otherwise it's considered as a "high credit limit" factor. Take VERY good care of your credit. You will need it.
