Reader Question: “If I pay a delinquent account, how long will it appear on my credit report?”
Reader question: If I pay a delinquent account, how long will it appear on my credit report? What are the best options in your opinion?
My answer: All delinquent accounts remain on your credit report for 7 years from the date that the account first became delinquent (unless you use a pay for delete agreement or credit repair to get them removed sooner). Paying on the account will not shorten or lengthen this time period. However, paying can actually hurt your credit score, and here is why: A credit score weighs your more recent payment patterns more heavily than your behavior from the distant past. When you make payment on a delinquent account that has had no activity for some time, it then becomes a recent negative item on your credit report, instead of an old one. So the payment actually dings your credit score. By the way, paying a delinquent debt does not turn it into a positive item on your credit report–the item will always be negative because of the fact that it was ever delinquent.
So what can you do? Above I mentioned pay for delete agreements, and/or credit repair. With a pay for delete agreement, you negotiate a deal with the creditor where you pay the debt (usually in a lump sum, and it doesn’t always have to be 100% of the debt–you can try offering less), and in exchange for your payment, the creditor agrees to delete the account from your credit report entirely. That is the only way you can help your credit by paying a delinquent debt! Creditors may or may not agree to do this, but it’s worth a try. If they agree to it, be sure to get the agreement in writing before you make any payment.
If the debt is now in the hands of a collection agency rather than the original creditor, I recommend a slightly different approach: request validation for the debt. Often collection agencies can’t or won’t comply with this request, and in that case they legally cannot collect payment from you, and they must also cease collection activity, which includes
listing the debt on your credit reports.
If the collection agency does validate properly, then you will be on the hook for paying the debt, and you should try to negotiate a pay for delete at that point.
I do want to point out that if the debt has been charged-off by the original creditor, and the debt is now being listed on your credit report by both the original creditor and the collection agency, the pay for delete
agreement from the collection agency won’t remove the listing that was placed by the original creditor. The listings will have to be dealt with separately. If a debt is charged-off, the original creditor usually will
not accept payment for the debt. If this is the case (or if a creditor/collector will not agree to pay for delete), credit repair is your only other option to get the listing removed. You can find a reputable company to repair your credit for you, or you can try doing it yourself. You can try removing the listing through credit repair whether or not it has been paid, so if you pay a debt that the creditor/collector would not agree to delete, you can try to have it deleted later.
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