Negative items/accounts stay on your credit report for 7 years - but then what happens, you have good credit?

Question

So I'm curious to know - what happens to your credit once all of those negative items stop being reported? Does that clear your slate? Seems too good to be true. Also, in the meantime, does it look better to potential lenders to see that your accounts in collection have been paid? Even if they have gone to collection? I am trying so hard to fix up my credit and I dont know where to start! It is hard to do when you just dont have the funds available to just pay it all off! Any advice? Can anyone tell me how this works?

Answer 1

the 7 year is for them to sue.

You owe the debt. PAY IT or we'll go into The great depression 2.

Answer 2

Yes it is true, negative items will eventualy drop off your credit report, but that only applies to certain types of debts.

The credit bureaus keep your personal credit history for periods between 7 and 10 years:

Unpaid Tax Lien - Indefinitely

Chapter 7 Bankruptcies - 10 years from date filed.

Public Records - 7 years from the date of payment;

Closed or Inactive Accounts - 10 years from the date of last activity;

Derogatory Accounts - 7 1/2 years from the date of original delinquency;

This does not mean that the creditors will stop hounding you and if the debt is within you states SOL to file suit, guess what, they will take you to court.  If they win, then the judgment shows up on your credit report and will ramain there for the usual 7 1/2 yrs (Running of Reporting Period - Section 605 [15 U.S.C. § 1681c]

And even if you ignore the judgment and you live in a state that does now allow wage garnishment, and you own nothing of value, they can renew the judgment every 10 to 20  years (depending on what state you live in).

Now if the debt is a small oneand too old a debt to seek legal action,  then just let it ride out the reporting time'

Hope this answers your question

LEGAL DISCLAIMER:  The advice contained herein is for informational purposes only.  It is not to be construed as Legal Counsel nor Legal Advice.

Answer 3

Derogatory items age off your credit file 7-1/2 years from the date of first deficiency.  Nothing restarts that clock.   They no longer impact your credit.

If you have negative items on your credit file that you want to settle, get a copy of your credit report.  Start with the newest derogatory items and work back to the oldest.  The older the item, the less impact on your score.

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 deal.  Payment plans have to be short term.

Get any settlement agreement in writing and save it along with your payment proof, forever.  Do not give collectors direct access to your bank accout.

Paying old debt will not improve your score unless you get the item deleted for pay (works best with single entry items like cell phone, medical, and utiltiy bills).  Paying old debt can actually initally lower your score.  When you pay old debt, it becomes a current transaction and counts more in the calculation of your score.

However, creditors look at your whole credit report, not just the score.  Paid old debt always looks better than unpaid.

Answer 4

Yea! When its past 7 years it will come off and yes you need to pay these debts off even though they may still report they will at least say 0 balance, most lenders require you to pay off any collections, you get a second chance to do good yes its true. Dont blow it this time!!

Answer 5

Yup...once you're post 7 years you get another chance to make a 1st impression on lenders.

Ofcourse it's better to have eventually paid the collections...so you acknowledged the debt and dealt with it. Only future lenders will hope that you'll deal with future debt more pro-actively and in a timely manner.

Here's some advice:

1. Order your credit reports from the 3 bureaus

www.equifax.com

www.experian.com

www.transunion.com

If you're ordering for the first time, get your score (for a fee) from Equifax as their scoring matters most.

2. Make copies of your report and put the originals in a binder. On the photocopied reports use a highlighter and check for any incorrect, outdate, false, etc...info

3. Download a dispute letter(s) from the credit bureaus website and list anything that is wrong. Mail them to their office(s). They have 30 days to reply.

4. If they will not remove something that is not yours or too old (> 7 years) as them for a debt validation. This may take an additional 30 days.

5. Once the 'baddies' come off, take care not to let any of your other accounts fall into that predicament.

6. If you haven't already make sure your existing accounts are current and paid on time ALWAYS.

7. Get a secured credit card with www.capitalone.com or www.mastercard.com for like $500-1000 or more if you can and use it sparingly. Charge like $50 on the card each month and pay it in FULL and on TIME. Make sure you do this for a minimum of 6 months so that you estabish a positive repayment history.

8. Problem with just letting them (collections) 'fall off' is that they may never. You may get sued before that...that's where you suddenly get a summons to appear in court and a judgment for collection against you.

For collection items...pay them but get a 'pay for delete' from the collection agency in WRITING...they'll delete it after you pay and it will help your credit score.