The one bit of good news, though, is that what happened to Cynthia -- a score plunge because of a new payment on an old debt -- is much less likely to happen today. That's because the company that creates the leading credit score, the FICO, worked with credit bureaus to iron out that particular wrinkle in the formula.

But there are still other problems that can arise:

* Settling accounts for less than you owe can often hurt your credit scores.

* Arranging a payment plan or even inquiring about an old debt can restart the statute of limitations in some states, allowing creditors to sue youhnoes: .

* Simply contacting a creditor about a past-due account can revive its interest in trying to collect, leading to harassment and hardball tactics.

* 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.

If the original creditor shows a charge-off with a balance still owed, you might be able to boost your score by paying off the bill and getting the original creditor to reset the balance to zero.

If the balance is already zero -- which credit bureaus say is typical when a collection agency takes over an account -- you can't improve your score by paying up.

"If the trade line balance is showing zero, you're not going to help your FICO score by paying off a collections account,"

You still can hurt your score, however, by "settling" an account for less than what you owe. Such settlements may get the creditor off your back, but the notation of "settled" on your credit report can sometimes be worse for your FICO score than just :whoa: leaving the account open and unpaid, said Barry Paperno, a Fair Isaac manager.

Virginia Statutes of Limitation

Open account: 3 years from the last payment or last charge for goods or services rendered on the account.

Written contracts (non-UCC): 5 years.

Sale of goods under the UCC: 4 years.

Virginia Judgments: 10 years, and renewable (extended) to 20 years.

Foreign judgments: 10 years.