Can paying off old delinquent and charged off accounts improve my credit?

I am trying to repair my credit. I have a lot of delinquent and charged off accounts. Will my credit still improve even though they have already been charged off?

There's a lot of answers on here, some with valid points and some not so valid. Here's my take on it. Can paying off old delinquents and charge offs improve your credit? Yes and no. Reason being that there's a lot of mitigating factors that are involved. The main factor is time. If I were in your situation that would be one of the primary things to look at. Also it helps to know that there are 2 seperate statute of limitations when it comes to debt. Collecting and reporting. Under the Fair Credit Reporting Act, a derogatory item can be reported up to 7 years from the date of the last activity and the statute of limitations for collecting the debt is the time allowed to collect on a debt and resort to litigation (taking you to court) for it. This statute can vary from state to state and the statute applies to the state that you opened the account in initially.

Having said that, now you can effectively create a battle plan on how to deal with the debt. A formula that I've come up with is that if the original debt is 5Â½ years and more, I'd let time take care of that and let it fall from your report. The delinquency is so old that it's not doing any more damage than it is now. For debts that are around the 3-5 year mark, I would check the statute of limitations for these debts to see if they're expired. Chances are your knowledge of the SOL can be a powerful bargaining chip when it comes to negotiating payment. Debts that are less than 3 years are doing the most damage and should be handled first.

Now if you're planning on paying these debts keep in mind that you may need a substantial amount of money on hand becuase some may not accept payement plans and also what you would want to shoot for is a "deletion payment" which is a payoff amount that can get it removed from your report. This sometimes may require that you pay the whole amount in full. Now while it's not common for collectors to do deletion payments, it can be done. Arrange the debts in order from least to greatest depending on the age ranges that I gave you. The much older debts I would save for last. Another thing is to know where you are with the SOL with each debt before you contact the collector, as that will give you a leg to stand on when you negotiate. Collectors bank on the fact that the average person doesn't know all if any of their credit rights. While it's not morally right to shaft anyone that you owe, you should also try to protect yourself from ruining yourself financially any further.

Now, I have some tips on dealing with the collector. When calling request to speak to the MANAGER. Not a supervisor, a MANAGER. Advise the rep that you're not willing to discuss anything unless it's the manager. Reason you want to do this, is that the manager would be the one that would be able to make a desicion on removing it. By speaking to them directly, you eliminate the middle man in the equation. Once you get a manager introduce yourself and advise them that you have an account with them they're trying to collect on and if the statute of limitations has expired let them know that, however you're still wanting to reconcile the account with a deletion payment of 40% of the original debt. (It helps if you have the 40% already calculated and give them that amount) BE firm, some collectors would rather take a tax write-off than accept your payment just becuase you're dictating the terms, especially if you disclose that the statue of limitations has expired and they can't take you to court for it. I didn't say that it would be easy. They may decline that offer and counter with another one that may be considerably higher (like 50-60%). Simply reaffirm that the statue has expired but you're wanting to reconcile the debt with them in exchange for them removing it. They may or may not go for it. If the statute of limitations isn't expired, then of course you may have to pay the full amount. If you're able to get them to agree to this, have them not only mail but fax you something on their company letterhead stating the terms of the deal and a copy of the universal deletion letter for your records before giving them a dime. Also, DO NOT GIVE THEM YOUR CHECKING ACCOUNT INFORMATION. Advise them that you will be sending them a cahsier's check certified mail. Now, this is if they agree to it. If they don't you can still pay it, but keep in mind that the delinquency will still show, but will report "paid" or "settled" with a 0 balance, which is a strong possibility. If they don't agree on the ones with the expired SOLs, simply advise them that they're legally not able to collect on these debts and you will send them a cease and desist letter, stopping all contact and collection actions. Now at this point, the collector will either give it back to the original creditor or sell the account again to another collector, which you may have to go through this again. For the older balances that are 5Â½ years and older you can let time run its course and they stop reporting or you can try to bargain to have them removed.

Also, if you're successful in getting those delinquencies removed, keep in mind that the payment history, types of credit and length of time you had them even if it were bad, will be gone which shortens your file and you may have to start from scratch, especially if you don't have any open accounts in good standing. So be wary of that

Based on what I've told you what you can take from this is that you need to handle your most recent delinquencies first in order from least to greatest, be prepared to possibly pay in full on each if not all of them, and for the ones with the expired SOL negotiate that the best you can and hope for the best, and the oldest ones wait it out: you've gone this long a little more time won't hurt at this point.

I've posted links to the statue of limitations by state and the Fair Credit Reporting Act

I hope that this helps you,

Good Luck!

For me it improved mine, plus I now know that I can control my spending and my credit history. Take a look at this site, it helped me
http://www.thecreditrepairmanual.com

Good Luck,

As a mortgage broker long term this will improve your credit on paper but not your score unless they delete after paying the charge-off but short term it will probably decrease it. The fico model is weighted as to the recency of the derogatory account so paying off a five year old charge off will reage the account to show as paid on the month they received payment and may very well decrease your score. If this account isn't a negative bank account or something you have to pay off to open another account or utility company and is beyond the statue of limitations for your state I wouldn't pay it if you are just concerned about bettering your score. Also making a partial payment even a dollar reopens the statue of limitations so a collection company can go after you in court and can make the item appear on your credit for even longer as the general rule is the negative shows on your report for 7 to 7.5 years from the date of the 1st delinquincy that lead to a charge-off or the date of the last payment whichever is later.

yes and it shows the lenders that u are trying to clean up your credit

What!!!!!!!
Girl you are kidding me and young too. Hey pay the cards off do whatever you can, but I have tell you it's going to be a long time before the credit company will give you a second chance, I know it can be very hard when you have the money and turn around and buy a new pair of Jimmycho shoes. Good luck girlfriend and Peace to you Brownies

Yes, your credit will improve once you pay off all your old debts and continue to pay on-time your current debts.

First look at your motivation. Are you wanting shape up your credit report because you want to get right with the people that you borowed money from or rather because every one tells you that:" you just have to have a good credit score. Why your just nobody if you have a bad credit score."?

If you trying to repair your credit so that you can take on more debt take a look at where debt and credit has gotten you so far. Seems like it hasn't worked so well in the past. Try another approach.

Are you ready to clean up that history? Have you cut up your credit cards so that you wont have to deal with this ever again? You cant fill in the hole you made for yourselve if your still inside the hole?

First make a list of everyone that you owe. I mean everyone. If you owe your dear old Aunt Petunia 12 dollars for dinner two years ago put that down.

Second go through the list and select the ones that have given up on you paying. If your credit is so bad now it wont matter if you don't pay them anything at the moment.

Third get current with everyone that is expecting you to pay. Put them in order from smallest to largest on the amount that you owe, not the amount of the interest rate. The goal here is to be out of debt as quickly as possible so a month or two of interest isn't really going to matter. Pay off that first one with a fury. Once you get that first one paid off there's a pat on the back for you. You will feel some traction under your feet. You ill feel like you really can do it. Take the amount that you were paying on the little one and roll it onto the next one. All the way up the list till you have them all paid off. Once your there you are ready to start dealing with your old debts. Don't try to deal with one of the old debts while your paying off your other debts because once they smell the money they will circle you like sharks.

Poke each one at a time and deal with them. Save some money before hand to have something to settle with. ALWAYS get the settlement in writing and NEVER lose it. You will need it for proof that indeed you did settle. Never give anyone access to your checking account.

Your credit may not improve but you self worth will. Once you get all that out of the way then you will truly be able to enjoy your wife or husband and your kids. The car will drive different now that you know noone can ever take it away. Going to work will be easier knowing that if they shut the doors tommorrow you will still have a house, a car, food and lights for your family.

Yes, because it will show that even though it was delinquent or charged off or whatever, it was resolved, and resolved is better than never paid.

No. If you have bad credit and you have charges, you have to pay religously every month. Don't be late on your payment and don't be absent either. This could improve your score.

Sure it will. If I borrowed money from you and didnt pay you back...think about how you would feel about me. Than if I paid you back, even though it was really late...how would you feel about me now?

What it will look like is that you wanted to take care of it but you had some difficulties and couldnt at the moment but got it done when you got the chance.

Your credit score will improve.

However, there are some things you need to do first. Find out what statute of limitations are in your state as far as reporting goes. If they are past statute, than you can report those accounts to the three major credit reporting bureaus and have them dropped off. Than you dont have to pay them.

If they are not past statute and are valid accounts. You can call the bill collectors and make deals. Like settlement arrangements to pay a less amount and close out. Additionally, try and have them throw in a "deletion". That means make a deal saying if you pay whatever amount than they will delete it off your credit report.

Some collectors or agents will tell you they will do so if you pay in full. Than do it. Pay it in full and get it deleted of your credit report.

BUT! Before you pay anything make sure you get the agreement in writing from the collector or agent. Be sure that it has the deletion bit in there as well.

Good Luck

The bad credit will appear on your account for ten years until then, there is no way possible to get it off.

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