Will paying this credit debt help?

People say that if your cards are in collections, you might as well not pay it because it will fall off your report after 5yrs. But if I did pay it, would it help? Also, what about settling said debt? I also have a debt from Chase credit card that I get a letter about from Chase. It offers to settle the debt. Would it be best to pay off the Chase debt in full, since it’s not technically in collections? As it doesn’t show up on Credit Karma. 

Thanks for the help. 

9 Answers

  • Anonymous
    2 months ago

    Please note that settlement of a credit card debt for less than what is owed may net some tax consequences.

  • 2 months ago

    When bad debt falls off your credit report (which is NOT automatically after 5 years), it doesn't automatically RAISE your score. Your score has been ruined already. Paying debt does increase it--but it also depends on what other items are on that report and for how long. 

    You think by avoiding paying your credit debt that is in collections you will avoid paying it EVER?  Think again. Old debt is often sold to collection companies. And they can be relentless and persistent in collecting, because that is all they do. And they will charge you a lot more to clear it than you would pay by simply paying it late or paying it to the creditor. If Chase Bank is offering to settle their debt, take the offer. It will be cheaper in the long run. 

  • 2 months ago

    It is 7 years it stays on your consumer reports, or actually 7 years and 180 days (6 months) from the date it is charged off. It is true that if it is in collections or a debt buyer now owns the account paying it wont really do anything to help your credit score. The damages were already done to your score when it was reported that it was in collections and/or sold to a debt buyer.

    Settling for less than owed, see above. If it is outside something called the statute of limitations in the state you reside, then you cannot be sued for the debt.

    Don't rely on Credit Karma for information about your consumer reports. Rely on the reports you actually receive from the credit bureaus.

  • 2 months ago

    Your debt doesn't magically disappear, it just gets bigger. 

  • What do you think of the answers? You can sign in to give your opinion on the answer.
  • n2mama
    Lv 7
    2 months ago

    It will take 7 years to fall off your credit report, not 5, but that’s only if they take no further actions on it. You can get sued for the unpaid balance (which will also include other fees), and when they win the judgement against you, they can garnish your wages. They also can renew the judgement if they don’t get paid, so it can hang out there against you for a long time. And even if it falls off your credit report it doesn’t make the debt disappear, you still owe the money.

    If you have the ability to pay it off, you should. Yes, you can settle it for less, and it does reflect differently on your credit report if you pay in full versus settling it. That only really matters if you are planning to apply for new credit in the next few years.

  • Anonymous
    2 months ago

    There are THREE credit bureaus.

    Having a Credit Karma account will not directly lower your credit scores. They request your credit report information on your behalf from TransUnion and Equifax. This is known as a soft inquiry, which won't impact your scores. On the other hand, hard inquiries can influence your credit scores.

    On AnnualCreditReport.com you are entitled to a free credit report from each of the three credit reporting agencies (Equifax, Experian, and TransUnion) every week, through April 2021. You can request all three reports at once, or request them one at a time.


    To be aware of:  Your credit score is only needed if you Rent, or Lease, or intend to borrow.  Some jobs require a credit  check, which may be unlawful in some states.

    Always pay off debt, and keep monthly accounts current. Your reputation is truly the only thing you own.

  • 2 months ago

    Paying off that large balance you carried for months on your credit card or making one last deposit toward your years of student loans is an unbeatable feeling. ... It's true that getting rid of your revolving debt, like credit card balances, helps your score by bringing down your credit utilization rate.

  • 2 months ago

    First, in the U.S., it's either 7 or 7 1/2 years, not 5.

    Second, paying doesn't always help, but paying in full is definitely better than settling.

  • 2 months ago

    Yes it does help if you pay it because when you have paid it they must send a positive remark to your file, if you never pay it you will never get the redeeming remark, even if it isn't worth them taking you to court over and there are otherwise no negative effects to your life, your file will be hurt by it never being paid. To settle at a lower amount is the same as paying it off in full, if they agree that you can pay less to settle it. You can make offers to settle too, you don't necessarily have to go with the settlement they suggested, make a counter offer.

Still have questions? Get answers by asking now.