How Long

[jmszjl]

I am currently, cleaning up my credit report.  I have several charged- off items, and just recently paid one in full (yeah).  My question is once its paid off how long does it come off your credit report and does the credit score go up?  Please let me know any info.. My goal is trying to get into a home soon, and would be applying for a mortage. 

Thanks.

[Boswd]

It takes 7 years from the date of your last activity before it went into collections.

Your score may go up a bit but not much.   But if you are looking for a house then getting these collections and co's cleared up is awesome because that would have been one of the requirements by your mortgage lender.   Good job.  Keep it going

[Anonymous]

If you have more collections that you are trying to get rid of, try to go for a PFD (pay for delete).  Agree to pay the collection, in full or settlement, only AFTER you have them send you a letter stating that they will completely delete the account from all three credit reports upon payment.  Then they come off of your credit report immediately (if the collection agency or original creditor agrees) and you will have an instant increase in score.  You may have success or you may run into hurdles but at least it is worth a shot.

[Anonymous]

jmszjl,

Paying a collection yields a paid collection and won't help your credit score. Like HouseHunter said, pursue a PFD.

If you only qualify for a subprime mortgage, a paid collection won't get you into prime territory but a PFD might. Also, subprime lenders usually won't require you to pay unpaid collections and chargeoffs so it's not to your advantage to pay them. And in fact it hurts you.

If you're already in prime mortgage territory, then a PFD will help you all the more, but if you cannot get one then your fall back plan is to pay.

Bottomline, no matter what, pursue a PFD and don't pay a collection or chargeoff without a PFD unless you absolutely have to.

Find out the SOL on the debts. Then you know how "hard" you can negotiate. If you're still under the SOL then they can still sue. If you're out from under the SOL, then you have a lot more leverage.
http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

[Anonymous]

The charge off wont come off but will be changed to paid or satisfied after charge off. At this point the mortgage company will assess your qualifications based on your fico and docs. The key is that all matters should be satisifed so you can get title clearance at closing

[jmszjl]

Hi

    Thank you for the info...Its really worth paying the charged off accounts since it been over 7 years?

[jmszjl]

Hi,

     Thank you very much for all the info.  Since these charges offs are over seven years, would that effect me getting a home? or should I just pay it?

[Boswd]

Well yes for two reasons

1.   Just for your own financial freedom.  It may be off your credit report but that doesn't mean that can't till persue the debt and try to get a judgment on you.

2.  More than likely if you are going to get a home, the mortgage lender will require you to have these resolved.  

[Anonymous]

jmszjl,

There are two separate and distinct issues here. SOL and the 7.5 reporting period.

An adverse TL can be reported to the CRAs for 7.5 years from the DOFD. There are special rules for judgments, liens, BK, school loans and probably a few others, but if we're talking lates, collections, chargeoffs and repos, then it's 7.5 years and it's off yer CRs. Done. End of story. DOLA doesn't matter here. DOFD is the date of importance.

The other issue is the SOL and whether a creditor can sue you. That varies by state. In some states, the SOL is much shorter than 7.5 years, but in other states it is much longer. Check the SOL on the debt in your state. FYI, CCs are almost always open ended accounts.
http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

Message Edited by Noah_Bodie on 05-08-2007 03:04 PM