Paying Off Old Debt When Repairing Your Credit Can Hurt Your Credit Score


Repairing your credit score is a task that requires a lot of effort and patience. One of the most common pieces of advice you will hear when trying to improve your credit is to pay off your old debts. While this is sound advice, there are times when it can hurt your credit score instead of helping it.

Why Paying Off Old Debt Can Hurt Your Credit Score

Paying off old debt does not always improve your credit score. In fact, it can sometimes cause your credit score to drop. One of the reasons for this is because paying off old debt can cause the account to become active again. As a result, the credit bureau will see that you have recently paid off an old debt and may report it as a new account, which can negatively impact your credit score.

Other Factors that Could Harm Your Credit Score

Even if paying off old debt does not cause your credit score to drop, it may not improve your score as much as you might think. For example, if the debt is several years old, it may not be affecting your credit score as much anymore. While paying it off may remove it from your credit report, it may not have a significant impact on your score. Additionally, other factors such as late payments and high credit utilization could be harming your score more than old debt.

What You Should Do Instead

If you want to improve your credit score, paying off old debt is still a good idea, but it should not be your only strategy. You should also focus on making all your payments on time and keeping your credit utilization low. These factors play a more significant role in determining your credit score than old debt.


Paying off old debt is a great way to improve your credit score, but it is not always the best strategy. If you choose to pay off old debt, make sure to monitor your credit score to ensure that it is improving. To truly improve your credit score, focus on all the factors that determine your score, not just old debts.

Categorized in: