Closed Accounts on Credit Report

[Melissa]

I’ve checked my credit report lately. There are a couple “potential negative – closed accounts” on it.
I have a few questions about it:

1) What exactly does this mean?

2) Because they are closed, are they still effecting my credit score?

3) Can I still contact them and pay them?

4) Will paying them get it off my credit report?

5) After 7 years will the entire negative mark be erased regardless if I pay them or not?

6) Is it possible to negotiate paying a percentage of it off and then having it removed from my report?

7) I understand that payed debt looks much better then unpaid debt on a closed account, but if it gets erased after seven years what does it matter?

Thank you!

[Lori]

Best to try to get these things cleaned up

Anything potentially negative affects your credit score.
Paying off these closed account will not remove them from your credit report, unless you make that part of the terms of a written agreement between you and the creditor before you settle.

As far as waiting 7 years for the debt to go away. Just remember that depending on how much are these debts – they may further sue you. Not only the debts are likely to increase, they wont go away, and will continue to drag down your credit score.

If they succeed and get a judgment against you – it can follow you around for the next 20 years. The creditor can place a lien against anything you own during that time to satisfy the judgment.

Best to try to get these things cleaned up if at all possible.

[Kathy]

The damage is done already

Are these just closed accounts or are they charged off accounts? There is a HUGE difference!
Closed accounts in good standing remain on your credit report for at least 10 years. They just don’t count as much in your score as open, active accounts.

If these are charged off accounts, the damage is done and will remain for the balance of the 7 year reporting period, whether paid, settled, or unpaid.

Paying off defaulted items will not improve your score, not get it removed.

You may as well negotiate settlement for as little as you can. Depending on how old the default, you should be able to negotiate settlement for 25% to 50% in a lump sum.

Get any settlement agreement in writing before you pay. Keep that agreement along with your payment proof forever. Do not give the collector direct access to your bank account.

If the debt is beyond your state’s Statute of Limitations (SOL), the timeframe to bring lawsuit, you may want to just ignore the debt and let it age off, especially if the debt is close to the 7 year mark.

[Roy]

Change you attitude to your debts!

You have really bad attitude to your debts. How would you feel if somebody owed you $1,000 and they refused to pay you back because if they managed to evade you for seven years, they could not be made to pay you?
If everyone thought like you, all service providers nationwide would be bankrupt and there would be no service available.

If I where you, I’d change my attitude, and contact them and negotiate settlements.

it’s common to settle old debt for as little as 35% of your debt.

Make them a suggestion, offer to pay 30 % and see if they take the bite.

If these are one time items such as medical bills, ask here how to do the pay on delete (this usually requires payment in full).

It’s better to take care of these debts now, rather than to wait for collection agencies to call up on you.
They usually wait right before the statute of limitations to sue you, and garnish wages and tap into your assets.

A word of caution: Never send anything with your checking account info on it. Always send a certified check by certified mail – DO spend the money.

[Author]

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