Question by love_earth22: How do I fix my credit and make sure my unpaid debt is taken off of my credit report?
I am getting sick of my bad credit ruining everything I try to do. At this point I am finally able to pay off my debt in order to fix this problem. I have heard stories of people paying off their debt but the company leaving them as unpaid on their credit report. I DONT want this to happen. How do I go about paying everything off while making sure it is taken off my credit report for good? How long does it take your score to change after you paid everything off?
Best answer:
Answer by bdancer222
Paying off old debt will not improve your score. The damage is already done and the derogatory item will remain on your credit report for the balance of the 7 year reporting period, whether paid or not.
However, creditors do look at your whole report, not just your score. Paid old debt looks better than unpaid.
With this in mind you should try to settle for as little as you can. If the debt is over 3 years old, offer 25%; 2 or 3 years old, offer 50%; less than 2, offer 75%. Lump sum gets the best deals. Payment plans must be short term. Get any settlement agreement in writing and keep it along with your payment proof, forever. Do not give collectors direct access to your bank account.
If any of the derogatory items are single entry items like medical and utility bills, negotiate a pay for delete — you pay $ x and they remove the item. This will help your score. But it doesn’t work for regularly reported items like credit cards and installment loans. The collection agency can’t remove what the original creditor reported.
After you get every thing cleared up, you will need at least 24 months of consistent, on time payment history to see improvement in your score.
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