CREDIT SCORES GOING BACK UP?
Posted in Credit on 12/10/2009 09:03 pm by admin
jean e asked:
ONCE, a credit card is charged-off and reported on the consumer report and then a settlement is made and paid will the credit score go back up?
WOODROW
ONCE, a credit card is charged-off and reported on the consumer report and then a settlement is made and paid will the credit score go back up?
WOODROW
12/13/2009 at 4:18 pm
JOSHUA
No, paying off derogatory accounts will not improve your score. The damage is already done and will remain on your credit file for the balance of the 7 year reporting period. The older the item, the less impact.
However, creditors look at your whole credit report, not just the score. Paid old debt always looks better than unpaid.
12/14/2009 at 4:02 am
EDWARDO
Yes, in time.
Since the credit card company will longer be entering a late payment for you every month that will stop the bleeding.
However, it will not go back to where it was [at least in the short term] because the lates still stay on your record but it will improve within 90 days.
12/15/2009 at 4:27 pm
ERICH
Not by much. Once the charge-off occurs, the credit score damage is done. And a settlement is worse than a “paid in full” collection.
12/15/2009 at 10:02 pm
MITCHEL
Hate to be the bearer of bad news but your score will not increase just because you paid in settlement.
The charge off will remain only it is now listed as a potentially negative entry and not a derogatory one as it was at first when it was charged off as unpaid.
If you had a written agreement with the creditor to delete the entry once paid in settlement, then your score may rise but not by much.
It will however have less affect over time as it ages on your credit report. It can only be on your report for 7 1/2 years and that is from the date of last missed payment.
Also be careful, if the amount that they did not get paid in the settlement is over $600 they must (under IRS Rules) file a 1099C with the IRS and send you a copy because it has to be included in your tax return as income. (see source)
Hope this helps answer your question.
12/17/2009 at 4:11 am
JUSTIN
Ask lenders for agreement to delete this items from your credit report when paying them. I recommend to get such agreement thru credit repair agency, for example this one – creditreport.imess.net