...items that have already been written or charged off on your credit report? Everytime I pay off one of my "seriously past due" debts I see no change. I know morally I should pay it, but does it do anything for my credit?
2007-08-15 08:06:26 · 7 answers · asked by imapirateaarr 5 in Business & Finance ➔ Credit
Paying an old debt will not re-age the account to report for a longer period than it would normally report. Re-aging an account to make it report for a longer period is illegal.
In most states, making a payment on an old debt does not re-set the collecting SOL.
In some states making a payment will re-set the collecting SOL IF there is a written agreement to pay. If there is a written agreement to pay, the only way that a creditor/collector could legally sue is if the debtor fails to live up to the agreement.
If you pay without requesting that the collector deletes what they are reporting upon payment, the account will be "updated" on your reports to reflect the payment - updating is not re-aging. It will make the account "look" newer than it actually is. That is why you have not seen your scores go up after paying off a bad debt
(original creditors will rarely agree to deletion, collection agencies will often agree)
If the accounts are with collectors and the collectors are reporting, the original creditors MUST report a zero balance
You have a legal right to dispute any inaccurate info that is being reported on your credit reports.
If the accounts are with collectors and you have not requested validation of the debt, you should request it before you start talking to them about payment.
You should also never sign your name to any letter that goes to a collector - only print your initials or type your name.
You should always send your letters to collectors by certified mail return receipt.
After they properly validate the debt, you might consider sending them a letter to pay a portion of the account as "payment in full". How much you offer to pay depends on how old the debts are. (if you are past the legal collecting SOL for your state, you do have a legal right to send them a SOL letter and a legal right to not pay)
You should also request in that letter that they will delete anything they have placed on your credit reports upon payment.
I would not recommend paying until they agree to those terms (that is only my opinion)
I would not recommend paying with a personal check. Use a money order or cashiers check to pay with.
You might click on my profile and click on the last link listed. You will be able to find free sample letter templates for validation, pay for delete and SOL letters. You will also be able to learn the collecting SOL in your state.
2007-08-15 10:25:42 · answer #1 · answered by echo 7 · 0⤊ 0⤋
The reason is that consumers pay off collection accounts and charge-offs which they do not have to pay off because the Statute of Limitations has already expired for the account. Consumers pay off those accounts because the accounts still show up on their credit reports. People also pay off these accounts when they are not even on their credit report because it was already removed by the credit agency. This information can be a good tool for getting rid of old debts. Creditors only have a limited time in which to sue you under law. The Statute of Limitations law starts from the day the debt or payment on an open ended account was last due.
2007-08-15 12:58:47 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The other thing to add to the 1st part of the 1st answer is that when you make a payment on a seriously past due debt, you restart the statute of limitations on the debt, so if you make a $20 payment and then no others, they can sue you to try to collect because you restarted the SOL and now they have grounds to try to collect again...
2007-08-15 08:13:52 · answer #3 · answered by Anonymous · 3⤊ 0⤋
usually, by the time they write it off, its already a pretty old debt, and older debts dont really do much damage to you. you are right, morally you should pay it back.... but hey, you should drive the speed limit too, and who does? lol. you can pay it off if you like, but you will see little, if any change. and congrats on having them write it off! that is much better than "see you in court!"
2007-08-15 08:15:42 · answer #4 · answered by swatthefly 5 · 0⤊ 0⤋
you dont pay them off for your credit report, you pay them off so debt is releaved. credit reports last 5 years. so if you pay it off now, 5 years from now it will be gone. If you wait 2 years. then 7 years from now you will have a better report.
2007-08-15 08:14:16 · answer #5 · answered by Anonymous · 0⤊ 0⤋
The older the debt is, the less it affects your score. Debt older than 48 months is not reflected in your score.
2007-08-15 08:10:33 · answer #6 · answered by sdfkjgs;ldgkjs;dkfjs;igjqakdsfhd 2 · 0⤊ 1⤋
It will show for a time as "Collection", and/or slow pay.
It is not removed.
2007-08-15 08:14:55 · answer #7 · answered by ed 7 · 0⤊ 0⤋