Beware Of Credit Repair! - Page 2
When I was collecting I often had people say to me "My credit is ruined so why should I pay ?" After I explained to them how the credit bureau worked, and showed them that they could fix the damage they where happy to pay. Many people get behind on their bills, figure their credit is ruined and just give up and never pay the bills. So it reports bad to the credit bureaus and they never make any payments on them so it stays bad. Many think that if they get behind that they automatically can't get credit for 7 years.
While it is true that it may report for 7 years so will any payments you make after the time the account went past due. It is similar to a stack of boxes. If the last box says bad then it lowers your score and all your future creditor can see is the bad box. But if you make payments after that it pushes the bad box down the line. The creditor can still see it but it has less importance. So even if you got behind or haven't paid it for a long time either beginning to pay on it or paying it off or settling it will help your credit score.
I have often seen people who thought their credit was ruined and all they had was a few hundred dollars in unpaid medical bills or a small credit card. I advise people that they should just pay off small accounts either in full or by payments. In some case making payments on the debt may be better for your credit than just paying it off in full. The reason is that the credit bureau is really just a record of how consistently you make your payments. If the account isn't charged off and in collections then you are probably best to just make payments. If they don't update the bureau until it is paid for then by all means go ahead and pay it off.
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