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My credit score is very low (around 500). I have a bankruptcy that will be 5 years old this year. Since then I have had about 5 accounts charged off. (Went through a really rough time…dont judge!) That was about 2 years ago.
I have one installment account that I opened and just recently paid off. That account should be in good standing. But that is all that I have going on with my credit report. I don’t own a credit card that I make payments on. I just use a prepaid visa as a credit card if I need one.
What would be the best way to make my credit report better?
Will paying off those charge off’s even help at this point?
Does having an open line of credit in good standing a good thing for your credit score?
How long will that bankruptcy show on my credit report and how will that affect my credit score once its gone?
Thanks for any help!!

1 Thought on Will paying off charged off accounts help my credit score? and other questions….?
  1. Reply
    August 2, 2011 at 4:45 am

    Typically, your bankruptcy stays on your report for ten years, and bad debts for seven years. Of course, the seven-year figure is from the time the creditor last reported it, so bad debts could remain for as long as creditors choose to update them.

    Any time you pay a debt it will likely have a positive impact on your scores; however, how much of an impact will vary based on the circumstances. If a debt has been sold to a collection agency, it will likely remain on your report and grow substantially until you either pay in full or pressure them to settle the debt or have it removed. Here is a good article discussing how to do this:

    When discussing a debt with an entity other than the original creditor, NEVER admit to the debt, and NEVER pay them anything without specific payment arrangements. Doing either of these could reset the statute of limitations for collecting the debt, and may give the creditor additional legal rights.

    Paying off a debt that has been written off and closed will not likely help your score unless you are paying the debt in full and the creditor agrees in writing to show the account closed in good standing. Having a prepaid debit card could persuade its issuer to issue you a credit card, but will have no effect on your credit report. It is not a debt instrument, and has nothing to do with your credit history.

    The things that will have the greatest positive effect on your report are time, and paying your current debts faithfully and on time. It may take a few years, but it will improve.

    Hope this helps!

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