Will Paying Off My Old/Bad Debts Raise My Credit Score?
August 13, 2018 | BY MOMBO | Views: 192
If you are worried about the effect of old or bad debts on your credit, 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
- Remove by paying in full amount Most mortgage companies 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 mortgage company 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 owing 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 that if repay one at one 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 to 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.