Question:

Does paying charge off accounts increase your credit score over time?

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I have recently come into a lump sum of money that is just enough to pay my credit cards that are all charged off by now. My goal is to rebuild my credit .

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5 ANSWERS


  1. Not really, You can rebuild you credit by checking your credit report and removing anything that has be on there 7 or more years except bankrupt it say on there 10 years. I think you can find another card company and it will help you rebuild your credit but the interest will be high.


  2. You will want to determine your actual status.  If the cards are not charged off, bringing them current will help your credit score.  However if they are charged off and being serviced by debt buyers or collection agencies it will improve your score little to pay them off.   Once you have obtained a charge off, that is a permanent mark that remains for 7 years.     Now, you need to determine if a debt buyer is taking other action against you.   If a debt buyer has sued you and has a judgement, that is an additional mark.  Moreover such SOB's can , given the judgement, take garnishments against your bank accounts or your earnings.   They also tend to report your account as a seperate entity on your credit report.

    Your best bet is to keep any current credit accounts you have paid on time.  Accounts in good standing that are paid regularly, without fail, increase your fico scores with all 3 credit reporting agencies over time.  Moreover, as charge offs get old, even at 5 to 6 years, they have much less influence than they did when new

    Only pay a debt buyer collection agency if they have contact with you and have sued you or they are about to sue you.   However if you have accounts with original creditors that have NOT charged off,  pay them current

  3. Yes it will happen ultimately but not instantaneously. The first  6 months after you pay you may not see a big change in your score, however within the 6-12 month range the score starts repairing itself. What you want to do is let your score go up on its own and refrain from applying for anymore credit during the first year....ideally 2 if you can wait that long.

  4. yes paying off old debts help increase credit score, but let me tell you this. It is not a quick fix for credit repair. You must be patient while you are repairing your credit, but you are on the right path.

    To find out more on how you can fix bad credit and do it for free check out this resource

    http://boostyourcreditscore.blogspot.com...

  5. Paying off derogatory items won't improve your score unless you get the item deleted.  If you have single entry derogatory items like cell phone, medical, and utility bills, you may be able to get a delete for pay agreement -- you pay and they delete.  This doesn't work as well for regularly reported items like credit cards.  The original creditor's charge off will remain, as collection agencies can only remove what they report.

    Paying old debt will initially decrease your score.  The older the item, the less impact on your score.  When you pay old debt, it becomes a current transaction and counts more in your score calculations, including the negative stuff.

    Creditors do look at more than just your score. They review your whole credit report.  Paid old debt looks much better than unpaid.

    Be sure to get a written agreement BEFORE you pay anything on that old debt.  Keep the agreement, along with your payment proof forever.  Do NOT give the collector direct access to your bank account.

    Also, you can probably settle for less than full balance.  If the debt is over 3 years old, offer 25%; 2 or 3 years old, offer 50%; less than 2 years old, offer 75%.  Lump sum gets the best deals.

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