Expert Debt Management
Expert Debt Management
What You Should Know About Paying Old Debts

Many of us focus on our old credit debts instead of on our newer ones.  If you have pulled your credit report and you aren't sure where to start you may believe that starting with the oldest debt is as good a place as any, but this may not be true.  Did you know that the last 18 to 24 months of your credit history is the most important to a lender or creditor?  While past credit debts are not a good thing, they are not going to affect your credit as much as newer debts.  So, when you are deciding what to pay on you will want to focus on the newer debts instead of the older ones first.

     Your most recent debts will affect you for the next seven years, which is why you should consider paying these debts first.  You are also showing potential future creditors that you can pay off your bills and that you are worthy of new credit.  While you may be happy that you should focus new debts first, don't let this sway your desire to pay off old debts, too.  You should simply start with the newer debts and work your way back.  You are still responsible for credit issues in your past and the more accounts that you are able to pay off or begin working on, the more your credit will improve.  If nothing else, future creditors will see that you can pay off debts and that you are serious about taking responsibility.

     The thing to keep in mind is that old debts fall off your credit report in seven years.  The result is that it is the more current debts that affect you most.  With more and more creditors looking only at what you have done in the last 18 to 24 months, it is important to focus on the recent past and present first.  In most situations you would be well advised to start in the recent past and work backward, but remember that all of the debts that appear on your credit report are ultimately your responsibility and what is seen on your credit report either adds to or takes away from your buying power now and in the future.

Disclaimer: This site is not, nor should it be taken to be, legal, financial or other professional advice. It merely provides a generalized guidance and generalized information only. Consult a financial advisor or an attorney to discuss any legal or financial issues involved with credit and debt decisions.
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