I have a loan through AES from 1996. It has several lates and I'm wondering if I should pay it all off now, or pay it off monthly for the next 6-12 months. If I pay it off completely, can I have it taken off my credit report? If I pay it off in regular installments, will that help my credit rating or would it be the same as paying it off now?

Thank you!

I guess this is where I'm confused. If the loan is already over 7 years old, how long will it take to age off? Is it 7 years from my last late payment?

Almost. Each late payment is considered separately and each, along with the loan, all have their own reporting SOL. The loan will stay on for at least 10 years it's paid off; the lates will drop off seven years (actually, it's technically 7.5 years or so, but 7 is easier to demonstrate) after each one occurs. So, say you had a late in January of 2000 and then others in January of 2001, 2002, and 2003 and then you finished paying on it in January of 2004. The loan itself would stay on until at least January of 2014. The lates, however, would be long gone by then -- the on from 2000 would drop off around January of 2007, the 2001 one in January of 2008, and so on. But, after all of the lates are gone (actually, after they're more than 2 years old, they begin to drastically lessen in their effect on your scores), you'll have a positive TL for quite a few years longer.

Aside from the issue with the lates, which maybe could change this a little (depending on how old the lates are and how close they are individually from dropping off), installment loans have a MUCH smaller effect on your scores than do revolving debts (CCs, etc.). So, just as far as which would help your score more, it's completely a YMMV thing and doesn't generally make that much of a difference one way or the other.

Hope this helps!! Good luck!!

Thank you very much! You explained that very well for me.