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Will paying off "charged off" accounts help my credit score?

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aeburse4

Junior Member
What is the name of your state?Maine

I have a few "charged off" account that I would really like to clean up. (Finally) But, if I pay those off, will it improve my credit score? If so, how long will it take to improve it?

Thanks
Amanda
 


djohnson

Senior Member
You need to negotiate it in as part of the deal with original creditor. You want them to show it as PIF or pull it off. Get the agreement in writing to make sure they abide by it after they get their hands on the money.
 

qumara

Junior Member
Paid charge offs/collections is just as bad as having a collections/charged off on your CR!!! I would do DV with the CA before I pay anything or dispute with the CRA to try and get them deleted (IMHO, I would try and get the CRA's to delete it first before I send any money!!)
1. Dispute with CRA (In most cases depending on how old the account is the CRA will usually delete it. I've done with a few of my charge offs)
2. Send a Debt Validation Letter to the CA.

If you want to pay the charge offs, do what djohnson said and make sure you get it in writing!!! Depending on who the CA is, most don't go for "pay for deletes". But its worth a try! But once you get the letter back from the CA saying they will delete upon payment, check you report in about 30-45 days to make sure it is gone!

Good Luck!
 

aeburse4

Junior Member
qumara~ so did paying the charge offs help your credit. I guess that is the bottom line. I just want it to help my credit. I am more than willing to go through all the paperwork and so forth, but in the end, I would like my credit to go up a few points if you know what I mean. :D
 

djohnson

Senior Member
Chances are it will only be a very few if any, but it does look a little better, especially if you are trying to buy something and you are borderline. Or you are trying to purchase a house. You will have to weigh what you are trying to get out of it.
 

aeburse4

Junior Member
I would like to purchace a home in the next year to year and a half. I have a lot of work to do before than.

I have older debts like...4 years..some 5 years. Here is another question. Do these fall off my credit report and if so when?
 

djohnson

Senior Member
they will be on there for 7 years. If they are on there longer question them. Making the payment however without guarantee they will remove it or show it paid, restarts the SOL so it can also hurt you in the long run. I know when we bought a house years ago, my hubby had a beeper bill come up on his report for like 16.00 for years prior. They held up our closing until he paid it and brought them the receipt in. Sometimes, there are no guarantees.
 

Tayla

Member
djohnson said:
they will be on there for 7 years. If they are on there longer question them. Making the payment however without guarantee they will remove it or show it paid, restarts the SOL so it can also hurt you in the long run. I know when we bought a house years ago, my hubby had a beeper bill come up on his report for like 16.00 for years prior. They held up our closing until he paid it and brought them the receipt in. Sometimes, there are no guarantees.
Dj, most of your advise is accurate. Please reconsider the way you stated the data on the SOL being restarted...SOL is not the same as how long it can be reported on a Credit report.
And may I remind the original poster that paying on a debt that went to collections, be it paid or NOT , does NOT increase ones fico score. What dj suggested is that IF: your buying a house or investment , most likely the mortgage place will demand that all collections/public debts be paid prior to dispensing of funding. Otherwise I'd advise on doing Debt validation letter followed by dispute with CRA's if any part of it is reporting less then 100% accurate.
 

djohnson

Senior Member
I stand by my advice. SOL is figured by last activity date. If he makes a payment without any guarantee, it can restart that date. SOL of how long an account can show on your credit report is 7 yrs or 10 for bankruptcy.
 

Tayla

Member
djohnson said:
I stand by my advice. SOL is figured by last activity date. If he makes a payment without any guarantee, it can restart that date. SOL of how long an account can show on your credit report is 7 yrs or 10 for bankruptcy.
From the FTC website:
"A consumer's credit account becomes delinquent on April 15, 1998. The consumer makes partial payments for the next five months but never brings the account current. The merchant places the account for collection in May of 1999. Since the account was never brought current during the period that partial payments were made, the delinquency that immediately preceded the collection commenced in April 1998 when the consumer first became delinquent. "
 

djohnson

Senior Member
Tayla said:
From the FTC website:
"A consumer's credit account becomes delinquent on April 15, 1998. The consumer makes partial payments for the next five months but never brings the account current. The merchant places the account for collection in May of 1999. Since the account was never brought current during the period that partial payments were made, the delinquency that immediately preceded the collection commenced in April 1998 when the consumer first became delinquent. "
That would be correct for when the account first became delinquent. It has nothing to do with the rest. How long it stays on your credit report and the SOL is not based solely on that if there is activity past the deliquent date.
 

aeburse4

Junior Member
Thanks guys....

I have done a lot of research on my own and have found that it will not improve my score necessarily (or at all) but that it will look better when I go to apply for a home loan.
 

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