Will Paying Off My Old/Bad Debts Raise My Credit Score?

credit score

If you are worried about the effect of old or bad debts on your credit score, we are here to tell you that bad credit doesn’t last forever! It will only take some improvement in your financial life to make the mistakes from your credit report completely disappear over time.

We know how much a debt collection can make it difficult to get new credit and loans. It can be the worst type of entries on a credit report. Now the question is, are you also having problems with your credit score due to the debt collection?

Well, don’t be too worried because every debt has its time period and will soon be removed after paying off the debt. How much time? It depends; for unpaid or delinquent accounts, it’s seven years and for Chapter 7 bankruptcies, it is up to ten year!

These bad credit reports can be quite frustrating when you are trying to clean the record while making any sort of big purchases like a new home, or a car or even starting a new business. We won’t say that the reports will disappear instantly from your record but we can definitely bring you some peace of mind. By following the steps given below, your credit score will surely improve at a decent rate.

Here are some possible ways to remove bad credit reports from haunting you any further:

  • Remove by settlement

Not able to pay the full amount? Try settling your debt. We would suggest you try this first because it can help your financial life too. Negotiations with the debt collector personally to delete your debit account from your credit report in exchange for payment is a great idea.

You must try it! A “settlement” payment is some percentage less than the actual amount you owe. Send a written request and after deletion, make sure to take a written letter of the agreements before making the payment.

This can be a long process so I suggest you take your debt file out a year before any purchase.

  • Remove by paying in full amount

Most lenders will need you to pay off your debts in full and many debt collectors don’t settle for settlement payments. For this, we would suggest that you pay off your debt in full ASAP and then proceed onto requesting the collector to change your report to say paid in full.

This will increase your credit score more than the settlement payment and show the lenders that you are responsible when it comes to paying obligations.

  • One debt at one time

Don’t try to rush things because it won’t help you much. A genius way to remove the bad records and raise your credit score is to take baby steps. What we mean to say is when you are ready to pay off one of your debts, just call up the company owning the debt and repay them fully.

Are you thinking of paying small amounts to all the debt collectors? That trail of thought may be natural but it’s not appropriate. Why? Because if you do so, now and then the companies will keep bothering you. Therefore it’s better than if you repay one at a time.

  • Positivity in recent credit history

It is important to focus on the present than just fixing your past records. Most companies will look at your recent credit records than that of six years ago. So be sure to keep your recent records clean.

  • Take time to raise your credit score

Your credit records won’t just magically improve in a day or two. It will take some time, especially if you have fallen behind on your payments for a period of time.

Don’t recognize a debt? Contact the company and gather basic information right away. If it isn’t you, file a police report and talk to the company immediately. Your debt will draw out helping you raise your credit score.

  • Don’t let it happen again

Now that your credit score is rising, don’t let it fall again! Make a calculated budget and don’t waste your money unless it’s absolutely necessary. It will keep raising your credit score over time and clean all your bad credit records.

Borrowing money can help at times of dire need, so think twice when borrowing money uselessly. If you’ve been following all the advice given here, I can assure you that your credit score WILL rise.

We would also suggest you have a look at Mombo Sacco if you want to protect your financial future. They offer loans of up to 5 times your savings at amazingly low-interest rates per annum. They do care for you. So don’t be a spendthrift! Be wise when spending.

Four Steps to Make the Most of Your Credit

how to build credit

Maintaining your credit health is almost the same as maintaining a healthy life. Just like your health needs balanced nutrition and proper exercise, your credit health also needs attention, balanced spending, and responsible behavior. Your credit can be a very important tool in your financial life and you need to know how to Build Credit score.

Are you planning on buying a new house or a land? Your credits will come in great help here. But if you don’t manage your credit wisely, you are going to just hurt yourself financially.

In this case, you should grow some healthy habits to keep your credit from ruining your financial health. Take control of your finances and establish good credit. Do not be confused: Credit score and credit reports are two different things and when you understand this, it makes it much easier for managing your credit. We are going to provide you a complete guide how to build credit score.

Here are 4 healthy habits you want to incorporate into your life how to build credit :

  • Wise choice of credit card

Getting calls from different companies to sign up for their credit cards? Don’t get drawn to their offers, research! It is important for you to choose a credit card according to your circumstances. Do your research on different credit cards before signing up.

Also, make sure to ask for their terms and conditions because it can be useful for you. Keep in mind of two things: to look for low-interest rates and making sure it has no annual fee. We also suggest you compare different credit cards to find out which one best suits your specific needs and requirements.

Don’t max out your credit card because it will affect your credit score and pay your dues in full each month to maintain a clean record. Limit yourself to one major credit card with the limit you can afford. Don’t go overboard with too many credit cards on your name.

  • Build credit history

Make using your credit card “responsibly” your number 1 priority. Credit cards can be used to build your score but it can also come down falling as an unforgivable curse due to misuse of it. Be sure to pay in full each month. This saves you some cash and polishes your credit report.

A firm credit report is a major part of securing your mortgage or a car loan at a lower rate. Try regularly reviewing your credit report. It is a vital part of managing a good credit score and guarding against identity theft.

Are past credit mistakes haunting you and resisting your credit score rise? If you’re wondering what to do now, we suggest you should pay off your debts in full so that you can start repairing your credit history.

If you maxed out your several cards, worrying won’t help- paying off the bills will. You can close down one or two afterward but keep your oldest card running.

  • Lower your interest rates

Are you overwhelmed by the high-interest rate of your credit card? Don’t worry, you may not be stuck with it forever. But how? You can always negotiate with your bank or credit card company to get a lower interest rate. If they deny, try asking them every now and then. Perseverance might pay off in this case.

If the first option doesn’t work, transfer your money to a new card with a 0% interest rate. This will allow you to pay off your debt easier and manage your credit score better.

  • Knowing true facts about credit cards

Let us tell you a fact: you don’t need to sign up for credit cards if you don’t need one. Yes, it’s true! Maybe you are better off without one. It may make you feel valued but it will all come crumbling down when you end up owing quite a lot of cash to the banks. And if you are using one, be careful about how and when you are using it and remember to keep paying off debts in a timely fashion.

When you learn how to build credit properly according to your situation, you will be fine. But if you’re unsure, then don’t get one in the first place! But if you absolutely must, we would suggest you visit Mombo Sacco for smart savings! They offer loans up to 5 times your hard earned savings, and very low interest rates. It’s quick, it’s simple and they are upfront about their dealings so no more worrying about any hidden charges and sweetest of all? It’s all digital so say goodbye to tedious paper works from now on.

Along with Mombo Sacco, try regulating these steps into your life because keeping a good credit report can get you the most out of your credit. So, no matter what your situation is, try to keep your records clean and the end your payoff is guaranteed to be sweet!

Digital Currencies- Why Investing in Bitcoin is UNSAFE?


The Bitcoin market is really a hyped-up one that is instinctively leading us to too many risks; price unpredictability is just one of them. We understand that your yearning to get an investment with high returns may take you to this market, but trust us, investing here would only put you in some uncertain risks. So, in case, you were deeply tempted to invest in Bitcoin, reading these reasons would surely compel you to amend your decision.

 People, these days, are desperate to invest in anything that can bring them instant riches. But, is that really a reason to step into the world of digital currencies? Well, don’t be fooled by what they show you, know some of the major risks of Bitcoin, which can actually put you in trouble, once you have stepped into the world of digital currencies.

  • Intense Unpredictability

Don’t be fooled by them, there is way too much risk than you think. Investing in Bitcoin is risking yourself to the extreme, as the prices are extremely volatile here. Many top experts even are skeptical about it being an investment, in real. The fundamental analysts don’t find enough of an ecosystem surrounding Bitcoin to acclaim it as an investment.

Aren’t people just making such an imperative investment decision with inadequate information? Of course, they are, which in turn, will just be taking them down in the end. One might consider it one of the best short-term investment plans, but certainly, it is not.

  • Hackers Seizes it Easily

Cryptocurrencies are easier to lose – This question matters a lot, whether do you keep the bought cryptocurrencies in the smartphone’s wallet or in the exchange? Well, the former route is the better option, comparatively. If we believe the researchers, there have been cases, where billions of dollars worth of Bitcoin were lost on exchanges. Of course, the hackers snatched it away. Isn’t that a big reason to secure your Bitcoin inside your Smartphones? Imagine how much can one loose to hackers, just with a few clicks. Ask the experts, where to invest money, and they will never suggest you investing in Bitcoin.

  • Security Concerns

The Securities and Exchange Commission and Consumer Finance Protection Bureau have become more active in the cryptocurrency oversight. Moreover, they have been warning for a very long time about the frauds that are occurring in the exchange. So, don’t you think we all should have understood by now, the jeopardy of being a part of this market? We mean, how can anyone still exist at a place, where unsuspecting investors and fraudulent activities are everyday’s matter?

  • An Unfettered Space

Don’t enter this unfettered space- Bitcoin market is not regulated by any bank or government entity. There exists no big authority, which can be reached for grievance redressal. You must know how the bank compensates when you buy something with a credit card and get ripped off, right?

Don’t expect the Bitcoin Exchange to compensate anything when you are completely ripped off. Consider it impossible to get the money back when you are in this market. Those who are already stuck in this market understand the pain of investing through unregulated schemes. So, experts are choosing not to recommend this as an investment with high returns.

  • Fees are Charged

The idea took the turn soon- So, initially, the idea was to create a back alternative, which could provide people the option of paying low fees. But, later it changed. What didn’t change was to cost a certain amount of the people. Trading cryptocurrencies will still cost you, the percent of the total transaction amount, which actually depends on the exchange. The fee charged depends on the total exchange done on the Bitcoin, worldwide. But, the more people trade in Bitcoin will lead to a higher fee, which simply means more fee will be charged. So, it is anyway an unprofitable deal for anyone.

The Verdict

Bitcoin might seem like an investment with high returns, but, after digging deep inside one knows how jam-packed this market is. How can anyone ignore all of those dicey paths, which are simply inescapable? It is therefore suggested to keep digital currencies like Bitcoin out of your list when it comes to investing in a good place.

All we would advocate is to probe into the pros and cons of this market before actually investing here. Don’t get fooled by the ‘made-up’ benefits that they flaunt to capture more investors, every now and then.