credit question?

1 - Not all companies report to the credit bureau.

2 - Pay off old debts will improve your conscience & your credit if they are legally on y

your report.

3 - Companies can inquire about your credit without your permission, most do not effect

your credit score.

4 - Paying off your debt on time as agreed, paying off old debt & the passage of time

will improve your credit.

1. False. Not all. Some companies don't believe it's worth the hassle. Some will only report if you don't pay.

2. False. A paid account will always look better than an unpaid account, but "your credit" is the combination of a bunch of different variables. There's no guarantee that paying off an old debt will absolutely outweigh all other variables to result in an improvement. To use an analogy, if a parent tells a kid that if they do 5 chores they can have ice cream, doing one chore doesn't guarantee that they're going to get ice cream.

3. False, but with the stipulation that not all inquiries are created equal. There are "soft" and "hard" inquiries. A hard inquiry is an actual request by you to obtain credit. This type of inquiry requires your consent. Typically, your consent comes in the form of there being fine print in a credit application saying that by signing that application, you are giving your consent. A soft inquiry is a request by someone to see your credit for purposes other than you intending to open a new account. Your consent is not needed for this type of request. The most common type of soft inquiry is one of your existing creditors checking in on you to see if you're paying your bills.

4. False. Paying off debts is only half of it. Time is the other. You can't not pay your bills for years and then decide one day to pay everything up and have your credit instantly become good. The fact that you didn't pay your bills on time stays with you. For years. However, as time passes, the effect of those older mistakes fades over time.

1. Not "all" companies report to the credit bureaus. Common monthly utilities like electric, phone, water, cable, and rent do not report to the credit bureaus that you are paying on time. These things only report you when you have missed enough payments to be sent to collections for the bills. These things are not "lines of credit" or loans. Rent to own companies also usually do not report to the credit bureaus. Only actual loans, mortgages, or credit cards actually make reports that could help or hurt your score.

2. Paying off old debts MIGHT help, but it is not instant. Depending on how old the debt is, sometimes the better option is just to wait and let it fall off the report just due to the age of the account. If you have something that you have not paid for five years and no one has taken you to court to collect the debt, then it might just be better to wait two more years and let it drop off verses making a payment which resets the seven year drop off time frame. If you can pay something in full, then paying it off helps redeem your credit. If you can't pay it in full and you intend to make payments, you could be setting yourself up for failure if you can't follow through in paying it off.

3. A company you are currently active with can check your score randomly to determine if they are willing to increase your line of credit or to see if are still worthy of the line of credit you have. This kind of inquiry doesn't need your permission. You gave them permission by agreeing to use their line of credit. This is most common with credit cards. A company that you don't do business with can't check your score without your permission.

4. No. Just paying off the debt isn't enough. You also need to establish new credit with faithful and on time payments.