Here’s the bottom line.
If you pay off any delinquent debt, all the creditor is required to do is show “paid” on your report. But all of the derogatory information about late payments, charge off’s and collections will still be there…and it will continue to hurt your score.
In those few cases where a creditor will actually pull your report and look at it, it doesn’t really impress them to see those debts as paid. They tend to only see the collections and delinquency part.
Therefore, what you need to do is contact the collection agency/creditor and negotiate with them. In exchange for payment, they MUST delete the item from your credit report. If the refuse, it does you no good to pay the debt.
They will tell you they can’t delete it…it’s against the law. That is a lie. I’ve researched this already…see my previous answers.
They will tell you that they will show “paid” on your report and that will improve your score. That is also a lie, and the fact is it can actually HURT your score!
ONLY if they delete the item will it benefit you. So make sure they agree to delete it, and get this agreement in writing.

The reason creditors look at your report is to determine the risk of loaning you money. Unpaid debts that you are making no attempt to pay is a great big red flag.
Look at your credit report from their perspective. Why would they loan you money? You did not pay back those other folks?
Yes, people get behind because of any number of circumstances. Making good on your “promise to pay”, even if late, is still making good on that promise.