Cleaning Up Credit

Beth is trying to clean up her credit and wants to know if paying off an old debt in full will help.

QUESTION: Beth and her husband are cleaning up their credit. They have $700 in credit card debt that is seven years old. Should they pay them off in full or settle on them to be done with them? Dave says pay what you can.

ANSWER: You have to look at your budget and say, realistically, what can you do? If you have enough to pay what you owe, you have a moral obligation to pay in full. As far as your credit goes, your credit is trashed. In that sense, whether you pay in full or not won’t matter. The best you can do is the best you can do with what you have. That will lead you to the right places, ethically.