You've made some financial mistakes in the past. Now that you are on track financially, you want to improve your credit score and settle old debts. Settling the payment of your past due accounts will help to settle those old debts. However, paying off past due accounts may not necessarily improve your credit score right now.
Past Due Accounts
Paying off past due accounts will improve your credit situation in the long run. However, because these are accounts that you have let go past due, you will be facing some credit repercussions.
Calculating Credit
Your credit score is calculated by the Fair Isaac Company. While most people do not know the exact formula for calculating credit, a rough estimate indicates that your payment history accounts for approximately 35 percent of your credit score.
Paying Off Past Due Accounts
In most cases, paying off your past due bills will not immediately improve your credit score. However, once your accounts are reported as paid your credit will start to slowly improve.
Free Credit Reports
Make sure that you know exactly what is on your credit report. Request a free copy of your credit report by visiting www.annualcreditreport.com.
Pay Your Bills on Time
The best way to keep and have good credit is to pay your bills on time every month. If you financial past is leaving you less than desirable credit, work hard to repair your credit score. Your credit score can have an impact on many important aspects of your life.
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