With the Memorial Day weekend fast approaching, syndicated columnist Lew Sichelman took a shortcut.
Lew Sichelman, 2002:
Beyond that, though, proceed cautiously. One thing you don’t want to do is pay off any judgments or collections that are at least 24 months old.
Not only is this “unlikely to get you where you want to go,” [mortgage broker Ginny] Ferguson warns, it could turn an old problem the scoring software views as insignificant into a new one the program sees as much more serious.
Why? Because scores are based on the last day of activity. So if you pay off a 5-year-old credit problem, it becomes a “yesterday event” that will have a much more profound — read that “negative” — impact on your score.
Lew Sichelman, 2010:
Beyond that, though, proceed cautiously. One thing you want to be careful about is paying off any judgments or collections that are at least 24 months old. Not only is this “unlikely to get you where you want to go,” Ferguson says, it could turn an old problem the scoring software views as insignificant into a new one the program sees as much more serious.
Since scores are based on the last day of activity, paying off a five-year-old credit problem could become a “yesterday event” that will have a much more profound — read that as “negative” — impact on your score.
2002:
In a misguided attempt to improve their credit scores, too many mortgage borrowers are taking steps that end up doing more harm than good.
2010:
In a misguided attempt to improve their credit scores, too many mortgage borrowers are taking steps that end up doing more harm than good.
2002:
Among other blunders, they are paying off judgments when they don’t have to, closing out old accounts they shouldn’t and opening up new ones and unnecessarily consolidating their credit cards.
2010:
Among other blunders, they are paying off judgments when they don’t have to, closing out old accounts and opening up new ones when they shouldn’t, and unnecessarily consolidating their credit cards.
Etc., etc.
From: Greg Fisher
Sent: Friday, May 28, 2010 1:10 PM
To: Watts, Craig H
Subject: credit score, FICO, effect of paying judgment
See https://blog.creditscoring.com/?p=1257
Does paying a judgment decrease the FICO score?