How will paying off old debt affect my credit?

Dear Consumer Ed:

I had a bill that went into collections. Now that I’ve paid it in full, will this continue to negatively affect my credit?

Consumer Ed says:

It depends. There are different credit scoring models, so it depends on which model a particular lender uses. Some newer models ignore collection items if they have a zero balance, so your credit score may improve once you pay off the outstanding balance. However, older credit scoring models do not ignore collection items with a zero balance. For those older scoring models, any bill that goes into collections is subject to a seven-year reporting period, regardless of whether the account is subsequently settled. The seven years begins 180 days after the account becomes delinquent. That means paying off a collection item will not have a positive impact on your credit score until seven years have elapsed.

However, practicing good credit habits starting now can help to improve your score over time. The two main components of healthy credit habits are paying current and future bills on time and keeping your outstanding debt low.

You can check your credit score for free on Experian’s and Equifax’s websites, as well as some other sites, such as

To see what information is on your credit file, you should review a copy of your credit report from each of the three credit reporting agencies (Experian, Equifax and TransUnion ). In consideration of the COVID-19 pandemic, all three of the credit reporting agencies are now offering free weekly online reports through April 2021. To access your free credit report, go to

Submit your own question to Consumer Ed.  Remember…we do not give legal advice. Always consult a lawyer about legal issues.

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