Having paid the debt make a difference to credit checks?

Question

I had a debt after I broke a contract with a mobile phone company, the debt is paid now but I know it will be on my credit history until 2010..When applying for credit (eg. internet plan) is the fact that it's been finalised taken into account at all?

Answer 1

Yes Its always better to pay it off, but unfortunatly unless you can get a letter from the cell phone company stating that the collection was an error it will have a diminishing negative effect on your credit.  

the best thing you can do it not make any more mistakes.

Answer 2

it's not a huge deal if the debt was paid in full. it will linger on your credit report, yes. But it won't be devestating. as long as all your other debts/bills are paid.

Answer 3

It depends on the lender. I know some banks will not lend you any money if you have a paid default until it has come off your credit file altogether. Always mention it before applying for credit and they will tell you if you have a chance or not.

Answer 4

If negative information is on your credit report it affects your scores and the way lenders look at you. Lenders make underwriting decsions based on factors they choose and they may or may not "punish" you for an old paid debt. Without a doubt a paid collection still afftects your scores negatively. In fact when you first pay a collection that can make your scores even  lower than before you paid it! Certain underwriting guidelines, such as qualifying for an FHA mortgage, only allow so much outstanding debt and so paying debts in that case certainly helps. As negative items get older on your report they affect your credit scores less and less. If this is the only negative on your report really lenders wouldn't care much about it and since its so olfd the score affect would be small also.