Q&A: When you pay an over-due/write-off item, how long does that (lack of a better term) “bad credit” stay on file?
Question by Bronzed: When you pay an over-due/write-off item, how long does that (lack of a better term) “bad credit” stay on file?
When I was 18 I started getting credit cards and loans, and due to youth, ignorance and inexperience I missed several payments and I believe I even have a certain card “written-off” for the amount of $ 3. Now that I make good money, I’ve accessed my credit report to pay off all fees and late items. How long will those negative marks stay on my file? I’ve heard “7 years,” I’ve heard “a few months to one year.” Obviously I am now older and wiser and wish to have- and maintain- good credit. If bad marks are on my credit report for several years, is there any way to expedite the process of having them permanently removed? Thanks!
Best answer:
Answer by TRAC
Generally, 7 years. If you pay on an item, it (according to what I’ve been told) “restarts the clock”. If you can pay something off in one lump sum, that’s best. If it’s going to be on the credit anyway, it’s better to have it paid, albeit late, than not paid at all.
I’m in the process of repairing my credit. I’ve had some charge offs as well, those close to being removed I don’t worry with. However, if something has a ways to go, I’ll pay off one at a time until they are all paid. If nothing else, it shows some effort to repair and while some creditors don’t even care about that, others will.
Good luck.
What do you think? Answer below!
You have to write Experion, Trans Union, and the other one(?) I forgot the name! It is a myth that bad credit magically disappears after 7 years. You can write a letter regarding the bad items. One letter per item and dispute that the item belongs to you. Scandalous, I know, But it worked for me. I got the advice from a mortgage broker that did that all the time for his clients. The company has 30 days to dispute the claim. If they do not respond then the item drops from your record. After so many years have passed and it is such a small amount more than likely it will drop off. It worked for me!
There is no specific time period, regardless of what we’ve heard about seven years, ten years, etc. When the creditor stops reporting it, it will fall off, depending on the repository’s specific guidelines (Experian, Equifax, TransUnion). If you don’t pay it off, it could be there forever–because it will get sold to a collection agency who will continue to report the debt as “current”. You best bet is to contact whoever is reporting the debt (original creditor or collection agency) and negotiate to pay it off if they remove the item from your credit report. Often they will agree to do this. Good luck.
I just did that with an acct. and I was late a few times and they reported it to bureau After I paid off bill I asked if they would please call and get that mark off of my report. She said she couldn’t because it is apart of my” paying of my bills” history. Bummer huh? Sorry to give you the bad news but your payment histories with creditors is like you finger print it’s yours to keep. I’m working with “Credit Attorneys” lawyers that that’s all they do is go in and attack charges that you dispute (even from 15 years ago) and ask your creditors for documentation to prove the charges are correct. If they don’t have documentation the charges are erased from your reports. Cool huh? Good luck, if you want to know more about these lawyers at this Law firm ask me a question to that affect I’ll keep checking answers
If you have actually paid the items off you credit report should show Settled in Full “SIF” or Paid in Full “PIF”. All credit on your credit report has ratings R1-R9 for revolving credit such as credit cards and I1-I9 for installment loans such as car notes. No matter how you pay settlement or full payment yourR or I status will no longer change. Where paying helps you is it lowers your Debt-Income-Ratio. As far as when it will come off is up to the credit holder. In seven years you can request it be removed whether you have paid it or not. The seven years extends from the time of last payment. So if you defaulted on it 5 years ago and was harassed by a collector to pay somethin 3 years ago your seven starts at that three year mark. The other advantage you have if you settle the account is that if you dispute the item after most companies will not respond because they have what they wanted all along, payment.
FYI: The older the information is on your credit report; “good” or “bad’ the lower the impact it has on your credit score.
Congratulations on your decision to value your credit. It is a very mature thing to do.
There are lots of misconceptions about credit, and some of the answers you received to your question are proof of that.
Anything adverse remains on a credit report for 7 years from the date of last activity. In the case of a bad debt or charge off, that date is frozen at the time the debt became more than 120 days late – the date doesn’t change if you pay it off. So if you had a credit card that was charged off 02/2000, regardless of whether you pay it, it will automatically fall off your credit file February 1st 2007.
The problem that can occur if you don’t pay the debt is that the company can file a judgment against you, and that can be reported for 7 years from the date it is filed, so it’s good that you paid those debtors. You can try requesting those companies put in a deletion of the adverse accounts; since you paid them, they might be willing to forgive you and cease reporting. They aren’t obligated to remove them until the 7 years is up, but it doesn’t hurt to try. When you contact the creditor, ask for a supervisor, then manager, and see if you can get your request escalated – you will have more success if you are polite, but persistent.
There are lots of companies and people who promise to fix your credit, or have negative items removed. If the report is accurate, however, no one is going to have them removed. Credit repair companies charge thousands of dollars, and all they do is write letters or call the reporting agencies and dispute that the accounts are inaccurate. You could do that yourself for free, and it would be preferable to letting some shady characters have your personal ID info, and having to pay them for it. I’ve worked for a major credit reporting agency for over 12 years, and I’ve even heard of credit clinics using their clients’ SSNs to commit fraud.
Good luck in your quest to improve your credit report – hope this info helps.
This is a very good example of why you can’t really believe the advice on Yahoo Answers. It’s very depressing to see so many people giving out wrong information, especially when I’ve posted this very same answer dozens of times. These responders simply will not take two minutes to research their answers.
Lesson to everyone, if they won’t give you a source of information don’t believe it.
No, it is not a “myth” that negative information comes off your credit report in 7 years. It’s THE LAW! The Fair Credit Reporting Act demands that all negative items must be removed after 7 years, starting from the date of the delinquency. It can NOT be restarted if its sold to another collection agency. Paying it off does NOT restart that clock.
Here is what you need to know.
There are only two ways a negative item can be removed from your credit report prior to the 7-year automatic deletion:
1) The creditor must remove it.
2) The creditor fails to respond to a dispute investigation.
Also note that paying off a bill does NOT get it removed from your credit report. All they are required to do is change the status to “paid” but it will still show collections or charge off’s. It’s still a bad report.
So what do you do?
Start by getting your credit report and examine it carefully. Look for any errors. You are trying to find a reason to dispute the entry. Then send out dispute letters.
Next, you can consider paying off the debt. Note that as debts get older they do not have as great an effect on your report. Therefore, if you make a payment on an old debt, it turns it into a “recent activities” debt and it will actually hurt your score.
So you need to make a plan. Contact each of your creditors and negotiate a payment plan. Tell them that in exchange for paying the bill, they must agree IN WRITING to delete the entry from your credit history. Remember the purpose of this exercise is to fix your credit history. It makes absolutely no sense to pay off a debt and still have a bad history! If they will not agree to do it, don’t pay them!
Pay off recent bills first, then work on the older ones. If the bill is over 5 years old consider leaving it alone, and let it drop off your report automatically after 7 years.
Meanwhile, while you are doing all of this, start re-establishing your credit. Get a couple of credit cards and use them carefully. Pay your bills! Your credit report reflects how you use credit, and if you quit using it altogether you will never restore your credit score.
Hope this helps you out.