Should I pay the negative things off that are on my credit report?

Question

I was told that the negative items that are on my credit report will remain there for up to 7 years rather or not I pay them off.So does it make sense to pay the items off, will it raise my score if i do?

Answer 1

Once again, another collection of terrible answers, especially from rlloydevans and SCH.

First, lets look at the facts.

1) By law, negative items must be deleted from your credit report after 7 years, beginning from the date of the delinquency. If they reage it (as SCH claims) you can easily sue them for $1000 for violation of the FCRA.

2) When you pay off an old debt, it does NOT increase your score. The reason is because the negative information is still being posted to your account. While they may show "paid" or "settled", it will still show information about late payments, charge off's and collections.

3) The ONLY way negative information can be removed is by having the creditor do it himself, or if the creditor fails to respond to a dispute investigation from the credit bureau.

4) Negative items are not given as much importance on your report after 4 years. The scoring system looks at the most recent activity items. If you pay off an old item (say 6 years old), that will turn it over into a recent activity item, and it will have a very bad effect on your score. While it will drop off in a year, you live with worse credit during that time.

OK, after you absorb all of this info, what can you do to improve your credit?

Take all of your negative items prioritize them.

1) Ignore any debts over 5 years old and wait for them to drop off your credit. Cross them off your list.

2) Dispute the rest and send a demand to validate letter. Some of your creditors will not respond, and those debts will be deleted. Cross those off your list.

3) Contact the rest of the creditors and negotiate a settlement. But demand that in exchange for paying the debt, they must agree IN WRITING to DELETE the negative items from your report. This is know as "pay for delete" and it totally legal. I have had many collection agents tell me it's not legal but they have yet to show me any law, agreement or contract that says otherwise. I have read the law, I have read the service agreements with the credit bureaus...trust me it's not there.

If they refuse to do it, cross them off your list. Why on earth would you pay a debt and not have it improve your credit?

This is the technique many of the credit repair companies use....pretty simple, huh?

Answer 2

Okay. Here is the way it works.
Negative items such as charge-offs and collections can only stay on your credit report for 7 years after the date of last delinquency. No matter how many times it is sold, the date cannot be re-aged. They will fall of whether your pay them or not; but depending on your state's SOL, the creditors could keep trying to collect the debt even after it is no longer on your credit report.
Now, if you decided to settle the accounts, your credit report should be updated to reflect that. It will say, "Account settled for less than amount owed" or "Paid collection"...something to that effect. Sometimes, the collection agencies do not report that and it is up to us as consumers to follow up with the credit bureaus and make sure that it's being reported.
No, your score will NOT increase when you pay your debts. If that was the case, then everyone would purposely get accounts sent to collections and then "buy" their way to perfect credit again. The only two ways to increase your score are to 1) pay your bills on time and 2) reduce your debt ratio. Paying past due bills is not included in that list.
Yes, it absolutely makes sense to pay off the items if you have the money. As I said before, once you get the debts paid, the credit bureaus will reflect your efforts. If you are applying for other types of credit, that will be a thumbs-up for you if the lender can see you took responsibility and paid what you owe.
I hope that helps. Good luck!

Answer 3

Yes. They are supposed to be removed once you have paid the collection off, however if it will change your credit score, I don't know. Check the date of each account that was posted for collection, if the time is nearing the end of the "7year" period than let it go intil the 7 years has ended. Why pay it off if it's already been close to 7 years?. Good luck with what ever it is you do, sometimes it is a real pain in the butt to get those accounts removed from your credit report, even if you did pay it off. I applied for a Best Buy card to buy a computer and was denied because later I found out I had 2 out standing medical bills on there. I had no idea because I've never had a credit card and never check my credit report, I took it for granted it was good. When I realized they were close to being dropped, I ignored them. So I waited and when they were removed "after much arguing" and went to Circuit City applied the same way as I did at Best Buy and was approved for a credit line of $8.000.00, "Ya I know" now I have a out standing computer from Circuit City and excellent credit.

Answer 4

There is a difference between a negative score for an item thjat was paid off, and a negative score for an item that was never paid off and was "charged off".

Having something that is a few month late is a mild negative to your account. Paying it back off, or bringing it up to date actually turns a negative into a positive because it shows that you honor your commitments.

Just allowing it to continue to stay on your account as a charge of just means it gets worse and worse.

Plus, the 7 years is only for the time of the current report. If the lender sends it to collection, then it doesn;t go away in 7 years, because the collection agency generates new reports, and those reports last 7 years. then maybe they get tired of collecting from you, then they sell your deadbeat account to another company, and they spend time collecting against you, and their reports last another 7 years.

That is the important thing, The individual report of bad credit stays on your report for 7 years, but credit reporting continues as for 7 years after all credit collection attempts are finished.

Ignore it, and the reporting goes on and on.

Pay it off, and those reports stop.

Answer 5

That depends. IF you get something in writing stating that they will delete the tradeline, I would say yes. Otherwise, you are risking doing major damage to your credit by starting the credit reporting clock over again. For example, if you have something that is a five year old collection, it will drop off in two years tops and it not really impacting your FICO that much now. If you pay it off, it will show as a paid collection, but a collection nonetheless, and will stay on your credit report for up to seven more years. A newer paid collection can damage your score much more than just letting it drop off. And if you settle for less than the original debt, guess what, that still shows as a charge-off.

If dealing with a collection agency or JDB, they will promise you the sun, moon and stars to get your money, not keep their end of the bargain, and sell your information to another collection agency/JDB.

Answer 6

You will need to pay these off should you want to get any further credit from lenders or another credit card. And yes your score will raise if all debts are paid in a timely manner. Negative items are usually there because you have defaulted on a payment. Financial institutions not only look at your repayment history but also all your accumulated debts and determine your ability to pay it off. If you have missed or been late with any payments you will have a black mark against you.

Answer 7

Absolutely! You especially should pay off the things that are small - I have seen people lose an apartment or a store for having minor judgements on their credit reports.

Plus paying off those items would help improve your FICO score, which I suppose is why you are asking this question.

Since we're on the topic of FICO scores, don't ever use more than half the credit limit on any of your revolving debt (Credit cards or Home Equity Line of Credit (HELOC) it will hurt you.

If you are in debt begin to pay off the smallest of your debts first, then the next smallest, this will help you pay off a lot of things quickly and you will feel as though you are making progress.

Answer 8

depends on how long ago that they are from. in general, i would say to pay them...but you should call the collections agency and try to work out a pay for delete deal. whether they go for it or not could go either way. in this economy though they are more likely to go for it. just make sure that you get the deal in writing before you send any money. also, insist on a statement of debt satisfaction and keep that on file. you would only be dealing with the collection agency as the debt has been sold from the original creditor to the agency, the original creditor is now out of the picture. that will show as a chargeoff on your credit report and that isn't coming off. any negs will be there for 7.5 years from the date of first delinquency.

Answer 9

This is an urban ledgend that these items will fall off...the original creditor will just reassign the debt after 7 years to a new creditor until you actually pay the debt. It is quite common that people don't pay just assuming that after 7 years the no longer owe and it is just so untrue...your only way to get rid of the debt compleatly is to pay it in full or settle for a lower amount than what you owe. This site is a great resource for information on how to negotiate with debt collectors: http://www.creditinfocenter.com/rebuild/

Answer 10

You need to check out this video on how to increase your credit score by using a 100% legal loophole. Here is the video URL: http://www.creditscoresecret.org

I was able to get to 595 from 489 in just one day and from 489 to 748 in just a few week; that's pretty fast in my book. Good luck!