Paying off Debt Can Hurt You?
I found an interesting article on MSN Money today explaining how paying off your debt can actually hurt you. I'm not going to advocate never paying off your debt, but it was an interesting read. I've copied the bullet points, to read the entire article go here.
- If a creditor has already charged off an account and sent it to collections, paying may not help your credit score and might hurt it.
- Arranging a payment plan or even inquiring about an old debt can restart the statute of limitations in some states, allowing creditors to sue you.
- Simply contacting a creditor about a past-due account can revive its interest in trying to collect, leading to harassment and hardball tactics.
- Unethical collection agencies may promise to upgrade how your debt appears on your credit report in exchange for payment -- then not follow through or make matters worse by making the debt seem more recent than it is.