Monday, January 12th, 2009

How to pay off Derogatory items on credit report, increase score?

I have some old key Derogatory reports in my credit report. Is there any way to pay these off to increase my credit score? Someone told me if you pay them off, it will still show negative on your credit report. What is the best course of action? I have under $5,000 in negatives on my credit report, and now I have a good job paying good money.

There are certain things that you should be aware of:

1. Items that are less than 2 years old are affecting your score the most

2. There are 2 important timframes regarding derogatory items

a. The FCRA(Fair Credit Reporting Act) time limit of 7½ years from the date of first delinquency or missed payment to the ORIGINAL CREDITOR. No matter how many times it's sold or transferred the date of original delinquency still applies.

b. The Statute of Limitaions(SOL) for collecting debt is the timeframe in which a debt can be legally enforced in court. This timeframe can usually be shorter than the FCRA, but in some states such as Wyoming, debts can still be enforced in court even after the FCRA reporting limit.

3. If you pay an older debt, unless you request a "pay to delete", which is a payment in exchange for removing it from the report completely, new activity is created making it a more recent collection which not only doesn't help your score, but it could hurt it even worse.

In your case, if the debts are around the 5-7½ year mark, I would leave them alone, and let them stop reporting naturally. Items that are 3-5 I would try to negotiate a pay to delete.

Paying them unless you can get them removed, would only be a waste of money, and possibly hurtful to your score.

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6 Responses to “How to pay off Derogatory items on credit report, increase score?”

src50 Says:
January 12th, 2009 at 7:47 pm

It will help. The negatives don't disapppear but they will show as now "paid."
References :

Natalia L Says:
January 12th, 2009 at 8:05 pm

The problem with having thigns liek that on your report is that they take a very logn time to dissapear. It's true that paying everything off and paying on time will help your score to increase. The best thing to do is to establish a good record going forward and to dispute anything that is incorrect
References :

Doctor Deth Says:
January 12th, 2009 at 8:26 pm

if they are still active accounts – they will continue to negatively affect your score for years – pay them off – they won't disappear – they happened – they will show on your report for at least 7 yrs, but they will also show as being paid
References :

groovy_girl_30 Says:
January 12th, 2009 at 8:41 pm

The best thing you can do is to contact each creditor individually and offer to settle. This will not make things come off of your credit report any sooner (each debt will be there until it is supposed to fall off, reagardless of payment), but it will show that it has been paid. While it may not help your score as much, it will show potential lenders that you made the effort to settle up your debts. If you think some of the debts have been listed on your report in error, you can contact the three credit reporting agencies to dispute the listings in writing. They are Equifax, Experian, and TransUnion. You should be able to find contact information for them on the net. Hope everything works out for you!
References :
Have worked in the bankruptcy field for 7 years.

$m¤¤v¥ £¤¢¤ Says:
January 12th, 2009 at 9:04 pm

There are certain things that you should be aware of:

1. Items that are less than 2 years old are affecting your score the most

2. There are 2 important timframes regarding derogatory items

a. The FCRA(Fair Credit Reporting Act) time limit of 7½ years from the date of first delinquency or missed payment to the ORIGINAL CREDITOR. No matter how many times it's sold or transferred the date of original delinquency still applies.

b. The Statute of Limitaions(SOL) for collecting debt is the timeframe in which a debt can be legally enforced in court. This timeframe can usually be shorter than the FCRA, but in some states such as Wyoming, debts can still be enforced in court even after the FCRA reporting limit.

3. If you pay an older debt, unless you request a "pay to delete", which is a payment in exchange for removing it from the report completely, new activity is created making it a more recent collection which not only doesn't help your score, but it could hurt it even worse.

In your case, if the debts are around the 5-7½ year mark, I would leave them alone, and let them stop reporting naturally. Items that are 3-5 I would try to negotiate a pay to delete.

Paying them unless you can get them removed, would only be a waste of money, and possibly hurtful to your score.
References :
credit analyst/underwriter

DAS Says:
January 12th, 2009 at 9:46 pm

Depends how old are talking about? 7 years is the time limit for negatives to stay on your report. That someone is correct they still will show on your report and just reflect the new information and new payment date. Also keep in mind that if you decide to pay, this updated information will stay on there 7 years from the new update info(date of last activity), sucks doesn't it? There is probably a lot of ways you can attack this problem, but what I would suggest first is to get some books on this subject or go to a credit repair, or credit counselor to get some help with this matter.
References :

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