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Illinois bankruptcy: Paying off bills doesn't repair credit score

The recession has left many people in Illinois agonizing over their finances. Whether bills are eventually paid off or the consumer files for bankruptcy, the impact late or unpaid bills has on that consumer's credit won't go away anytime soon. A person's credit history is made up of the type of credit the consumer has, a consumer's payment history, and how much credit a consumer has at any given time.

From this information, each consumer is given a credit score. That credit score has a lot to do with whether a consumer can receive additional credit for things such as car loans or home mortgages. Each time a consumer is unable to make a payment on a debt, his or her credit score suffers. Even though a positive report remains on a consumer's credit history forever, that one report does not continue to affect a person's credit score. The same is true for negative reports, but creditors are more likely continuously report negative information for as long as the debt goes unpaid.

For instance, if a patient is unable to pay a medical bill and it becomes delinquent, the provider may send a report to the credit agencies each month that the bill goes unpaid. The fact the bill was paid off will remain on the patient's credit history forever; however, the provider's negative reports will affect that person's credit for up to seven years. The patient's financial crisis could have passed, but the impact will be felt for many years to come.

When consumers in Illinois are unable to pay debts for a long period of time, it may be time to look at filing for bankruptcy protection. As mentioned above, each month that a consumer is unable to pay a debt, his or her credit report and credit score will suffer. Filing for bankruptcy will stop creditors from reporting on the delinquent account. This may provide the filer with the opportunity to stop the downward spiral, get a fresh start financially, and work on repairing the damage.

Source:, "Bad credit score can last long after debt paid off Medical costs biggest problem," April 25, 2013

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