Question:

If you a paying on a charged off account?

by  |  earlier

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will it still drop off your credit at the end of 7 years or 7 1/2 years. I know this can reset the statue of limitations I am just not too sure about the rest and I am trying to help a friend in need and she asked me about it and I said I think it will, but I just want to be sure.

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6 ANSWERS


  1. Yes.  

    Section 605 of the Fair Credit Reporting Act addresses this issue:

    Running of Reporting Period

    The 7-year period shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately

    preceded the collection activity, charge to profit and loss, or similar action.

    This 7 yr. period cannot be reset by making a payment or reselling the debt to another collection agency.


  2. Derogatory items age off your credit file 7-1/2 years from the date of first default.  This is per the FCRA and nothing restarts this clock.  

    The Statute of Limitations (SOL), the timeframe to bring lawsuit, is governed by state law and varies from state to state.  Typically, the SOL starts from the last activity or last payment.  Paying restarts the clock.

    There is a lot of confusion about these two totally separate things.  People tend to merge them.   And some folks insist on passing on incorrect information.

  3. seven years!!!

  4. There is no magical quick fix for bad credit repair that will wipe out your past credit mistakes, however there are things you can do to start the credit repair process.

    Learn credit repair tips here: http://fixcreditscore.wordpress.com


  5. Any activity on an account is reflected on your crediut report.  So the longer you make payments (or if you make a payment after some time) it extends how long it'll be on your credit report.  However, the upside is, your friend is doing the right thing by paying what she owes, and if she maintains good credit from here forward it won;t drag her score down too much.  Besides, a credit score only matters if you want to borrow money or get hired by a stodgy company.

  6. no one can really say how long it will stay on your credit.

    Just pay the thing and it will be reported and make your credit better.

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