FICO scores are available through all of the major credit bureaus in the United States including Equifax, Experian, and TransUnion. You can also get your scores directly at MyFICO.com. It’s important to note that the credit bureaus and many other credit monitoring companies also offer you their version of your credit score based on information from your credit reports, but these scores are NOT the same as your FICO scores and usually not the same scores your lenders will use. These scores are what are commonly known as FAKO scores and are more often than not, way off from your actual FICO score.

FICO scores can range from 300 to 850, but the majority of scores usually fall within the 600s and 700s. MyFICO reports that they are the only site offering all 3 of your FICO scores and the median FICO score in the U.S. is 723.

The exact scoring formula of FICO is kept very secretive, but they do tell us this:

Credit scores are calculated based on your rating in five general categories:

35% – Payment history
30% – Amounts owed
15% – Length of credit history
10% – New credit
10% – Types of credit used

Higher scores mean lower interest rates. If you’ve been declined for a loan, chances are lender has made their decision based on your credit scores. You can increase your FICO scores by removing bad credit and adding good credit to your credit. Learn how you can remove late payments, collections, charge-offs, bankruptcies, foreclosures, repossessions, judgments, and tax liens on your credit report to improve your chances at getting a loan.

How can this be possible? The Fair Isaac Corporation, the company that determines your FICO scores, has fairly determined that the most recent accounts on your credit count towards your scores the most. The older the account is on your credit report the less it factors in to your scores and a lot of times when you pay off a debt you make the account current. The only problem is that the credit bureaus still report the account as negative, but now instead of being old, it’s brand new like it just happened. It will stay on your credit report for 7 more years. This can damage your credit scores drastically.

Before you consider paying off an old debt on your credit report, you may want to contact the creditor in writing. Tell them of your good intentions and ask them if they will agree to delete the account from your credit reports if you settle your debt (lots of times for much less than you owe). Get their agreement in writing!

You must be careful when contacting creditors though. Arranging a payment plan or even inquiring about an old debt can restart the statute of limitations in some states, allowing creditors to sue you. Simply contacting a creditor about a past-due account can renew its interest in trying to collect, leading to harassment and hardball tactics.

Some debt collectors will actually refuse to delete the account from your credit reports, even if you pay. Others will pretend they are “not allowed” to. That is obviously not true.

Even worse, some unethical collection agencies may promise to upgrade how your debt appears on your credit report in exchange for payment, then not follow through or make matters worse by making the debt seem more recent than it is.

So, what should you do if they won’t agree to delete it? Simple – don’t pay it. Wait until the end of 7 years for it to come off of your report. It’s really not hurting your scores that much anyway and the older it gets, the less it factors in.

Instead of paying them off, work to get new positive accounts reporting on your credit report. As the old negative accounts become less relevant, the new positive accounts become more relevant and increase your credit scores.

Remember to always monitor your credit reports to make sure that unethical collection agencies don’t purposely re-age your accounts. It’s illegal, but it still happens quite often. Check your state’s collection laws to see how long a collector can collect on your debt. Once the debt is past the statute of limitations, they can no longer legally collect on that debt.