Do negative remarks drop off your credit report in 7 years and if so how does that affect your credit score?

Question

I am of low income and when I was 18 my mother signed me up for a bunch of credit cards. I am now 23 and have not had the means to pay off the maxed out credit cards. I am in college and i work part time. What I would like to know is how can I handle my debt? 85% percent of the items on my credit report have been charged off. I heard that even if I pay the amount owed it would still have a negative impact on my report. I also heard that after seven years the items drop off of your report. Well if the items are no longer on my report will they still affect my credit score. I don't really understand how this works. Please help...

Answer 1

Your credit score is made by using a formula that takes into account all the items on your report. If something drops off after 7 years (which yes, it does) then your score would be as if the item was never there-- so if its a charge-off, it would go up.

You cannot pay a charge-off. The credit company took a tax write-off and basically gave up on the debt-- so they cant turn around and collect on it. However, they may have sold it to a collection company- so dont be suprirsed if some new accounts/collections pop up. If you pay a collection company immediately when they contact you, often times it stays off your report.

As far as any cards you have that are NOT charged off-- contact them ASAP. Often times they'll waive overlimit/late fees if you agree to a certain payment each month- it saves you money and your credit.

Answer 2

Yes, the collections will have a negative impact on your credit even if you pay off the debt. Like in (American) football, if a team gets a 15 yard penalty but scores a touchdown on the next play, that 15 yard penalty will still count as negative yardage.
The only two things that raise your credit score are a) paying your bills on time and 2) lowering your debt ratio. Since you're not really in a position to do either, you will have to sit tight until your income improves in order to make a signficant impact.
Yes, collections do fall off of your report after 7 years, but be aware that the collection agency (or the original credit if the debt has not been sold) can still come after you and try to collect the debt. You were in breach of the terms of the cc and as long as you still owe, they can still ask for money.
I'm sorry to hear that you're in such a pickle at a young age! I've totally been there...it simply takes time to rebuild your credit. Good luck.

Answer 3

If the negative remarks are no longer on your credit report they can have no future implications pass the damage they have already caused. Often times though you have to request the remarks off of your credit report even if they have gone beyond 7 years. Bankruptcy is another story though. If you pay the amount owed in full like you are suggesting, of course you will be better off in the long run, but short term, the damage has already been done. My advice to you is that if you are deliquent on your accounts and can't afford to pay them as is currently, DO NOT let them get to the 6 month mark of deliquency, settle your debt. The longer you are in deliquency the worse it is, once you settle the debt you are on the road to moving your credit score up. Also, the longer your debt is active, the worse it can be, because the same debt can be transferred to a collection account, then an attorney. So basically you are getting hit 3 times for the same account, one by the creditor, one by a collection agency and lastly by a legal firm. You can email me if you have more questions.

Answer 4

Here is how credit works...Credit reports are made to make the consumer look bad..Whenever you have an account that is in derogatory or collection negative remarks will show and stay on your credit report for seven years. The longer the debt stays on your credit in negative your credit score will drop. Eventually depending on the creditor these accounts will be transferred to collections and for that one account it can report 3 addition times...making it seem that u owe more on that account..also keep in mind that collection agency sell your account to whomever will by them and charge you more. When a creditor get tried of sending the account threw collections then the may go threw a court and get a judgement on you and that can report for up to 10 years...Also one more thing find out what the status of limitations is in your state..For example in Maryland it is 3 years....That means that if you don't pay that debt in three years to the creditor after the 3rd year they can't report it....If you are unable to pay your debts then you may have to file a bankruptcy..which can hurt as well....

Answer 5

1. You can pay a charge off. Pay by check and send a copy of the cancelled check to the credit bureaus. Then demand that they delete the account and adjust you credit score accordingly.
2. Contact the other credit card companies and try to settle your debt. Make sure they give you a written agreement that when you pay the negotiated amount the account will be settled in good standing.
3. You can wait for the seven years to pass but you credit score does not necessarily improve by waiting.

Answer 6

They can be collected up to seven years, after that they cannot be collected but will show on your credit report until you send a letter of dispute that it wasn't you who requested the cards in the first place. This will affect your credit and it will take a long time to get off of the credit reporting. It takes time to establish credit and will take someone who will trust you to start by giving you a credit card. Once they do make sure you pay on time and do not ever be late not even once. Over time as you pay your bills on time you will start to establish good credit and it will show on your credit report and your credit score will start to increase your credit rating to higher scores.
Good Luck.

Answer 7

The seven-year rule says that the information will stay on your account seven years “from the date of last activity”. So if the last activity is when it is charged off then seven years from that date it will fall off. If you would pay so much as a penny on this balance the seven years will start all over again from the date the payment of one penny was received. From what you have posted and without knowing any more I suggest you ignore “everything” and let everything fall off. Then when you are ready to start over apply for a “secured” credit card. You will then be on the road to starting over.