Will a lump sum repayment of credit card debt improve credit score?

Answer 1

BEWARE!

One of two debts: 1) appears on credit report. 2) does not appear on credit report.

1) if it's on credit report as a defaulted account (charged off or anything) and it's suddenly paid, it will affect your credit iin a similar way - so if you had a 620 with an "open judgment" or "open collection account" and now it's a "paid collection account" it won't change much at first - maybe a 625. But over time, it will improve to eventually say a 690 or 700 in two years whereas an "open collection account" will continue to hurt you month to month until it falls off the report after 7 years.

2) if it does not appear on your credit report, suddenly paying it may and likely will land it on yiour credit report as a paid old debt - so don't do it!! Especially if the statute of limitations has passed for them to sue you in court, forget that debt. there's a real risk that something older than 7 years (so it falls off your credit report) will suddenly show up the moment you make a single dollar payment on the account because it's you affirming your debt and suddenly the 7 years starts to toll again!

Beware - this is a very tricky area! Lot of traps in this field.