Q: All my outstanding debt is paid off! Can you help me get it off of my credit report?
A: All items, positive and negative, stay on your credit report for 7 years. The good news is that these debts should now be showing as “paid” on your report. This should have a positive effect on your credit score. It may take some time for the creditor to change the status on your credit report as not all creditors report to the credit bureaus each month.
When paying off debt, be sure to keep proof of the payment. This can be especially important if you are applying for additional credit before the new status is reflected on your report. By doing so, you can prove to the lender that the debt has been paid in full. You can also send this proof of payment to the credit bureaus to have your credit reports updated.
If you accepted any “settlement” offers from your creditors rather than paying the debt in full, the status on your credit report may reflect “settlement” rather than “paid” or “paid as agreed.” If this is the case, it can have a negative impact on future credit for up to 7 years from the date of the final payment. Lenders will view this as a weakness – the philosophy being, “why should we loan money to someone who does not have a history of paying their debt in full?”
By Steve Axtell