Q: I have some cards that have been charged off. I want to pay these cards and have them updated. Is there a way I can do this?
Under the Fair Credit Reporting Act, negative information, such as a late payment or collection account that has been charged off, can stay on your credit report for seven years from the date of last activity. So, even if you pay off these outstanding credit card debts, be aware that your past credit blemishes will not be deleted from your credit files.
The only way the old charged-off accounts will go away is if you specifically negotiate with your creditors and request that they remove from your credit reports all information about or references to your charge offs.
Absent any such agreements, here's what will happen with your credit information after you pay those cards that were charged off.
Your Equifax, Experian and TransUnion credit reports contain summary information about your credit accounts. Specifically, each credit report has a "status" reference, indicating whether you've paid your debts on time, or whether you've been late - and if so, how late.
Your payment history is shown on your credit reports as your "Account Status," "Current Status," "Pay Status" or just simply "Status."
Open accounts with no delinquencies will have these types of "Status" comments: "Pays as Agreed," "Never Late," or "Current."
Closed accounts with a positive credit history will be noted as "Paid As Agreed," or "Pays As Agreed."
Negative information will most commonly be stated as 30, 60, 90 or 120-day late payments. Other negative comments include: "Collections," "Settled," or references such as "Paid, Was 60 Days Late".
If an account has been "charged off" or written off by a creditor as uncollectible, that fact will be noted too, typically along with the dollar amount charged off.
Anything in your credit file indicating that you didn't pay your debts as originally agreed will be viewed negatively by credit-scoring firms and potential lenders. And that's true even after you repay a previously charged-off account -- unless you negotiate with your former creditor to have the item removed. Good luck!
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