Should You or Should You Not Pay Off Past Debts

Do you want to clear off your delinquent credit card debt and clean up your credit report? Undoubtedly it’s the right thing to do and here is some more information about paying off old debts.

Delinquent debts stay on credit reports for years. When it is 180 days past due and you haven’t paid it, it’s tagged as delinquent. And from that day onwards, it will remain on your credit report for years, seven years to be exact, after which it’ll finally be erased.

If you have one of those delinquent debts and don’t mind seeing them for the next seven years of your financial life, then that is fine. However, expect your score to be considerably lower and good luck on the discerning eyes of lenders; you just might get rejected for loans you’re eyeing on.

But should you choose to pay off your old debt in the hopes of getting it out of your report then bad news; regardless of whether you pay it off, pay it in full, or forget about it altogether, it stays on your report until the due date. So if you’ve had that delinquent debt since January of 2006, you can pay it off but don’t expect it to vanish just like that; not until January of 2013 anyway.

However, you get some good things out of finally facing your responsibility. One, you’ll finally lessen your encounter with the collection agency. You have to admit that it’s never easy to duck phone calls, appearances, and harassment from this group. But once you start getting back on track of paying off your old debt, you’ll get some respect back. And eventually, when you keep up with it, they just might be lenient and finally make paying easier for you.

Secondly, although you may never gain extra credit points for paying off, you’ll get the favourable attention of lenders anyway. Your loan and credit card application may just get approved quickly; this is because lenders tend to overlook delinquent records so long as they are paid in full.

And lastly, doesn’t it just feel good to know that you’ve got no old debt lurking in your past, waiting to hunt you down in the future? When you’re free of old debt, you are guilt-free, knowing you’re a responsible debtor. It will eventually grant you the trust of other people as well.