How long does it take for credit scores to improve once debts are paid off?

[Paula]

I had 2 negative items on my report. A credit card charge-off that went to collection and a medical bill. I paid off both of them 4 months ago, but had seen no increase in my score. How long will it take for my credit score to improve?

[Tracy Winters]

Paying off derogatory items does not improve your score

Derogatory items do not disappear after you’ve paid them. The damage is done, and paying off the items doesn’t clear the damage or raise your score.

The items will appear on your credit report for 7.5 years from first delinquency, whether paid, settled or unpaid.

After two years the effect of these accounts on your credit score starts to diminish, and by the time they age of your credit report they have almost no effect on your score.

If you want to increase your score you need to re-establish good credit. You need at least 24 months of consistent timely payment history do that. Either credit card payments or an installment loan, or (preferably) both.

Although paying off derogatory items does nothing to raise your score – it’s the right thing to do, and it DOES improve your credit. Your credit is much more than just your score, and when future lenders review your credit report, paid debts look much better than unpaid ones. See why-pay-off-debts.html for more information.

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