When you go 6 months past due on a credit card and default, this is
noted as a charge off on your credit report. A charge off is one of the
worst things that can happen to your credit history and when it happens,
there is no undoing the damage.
- Negative events like credit card defaults and late pays will remain on
your credit report for 7 years, starting from the date that they
occurred. Even if you paid the charge off in full, it would still stay for whatever is left of the 7 year cycle. If you pay
this debt, your credit report will get updated to a Paid charge off with
a $0 balance. Your credit rating would not go up. Paid does look better
though and it might stop legal action down the road.
- Being that you'll have bad credit anyway, you might as well settle for
less, like 25%. Get all terms in writing before you pay. Never give
debt collectors your bank account #'s
- The debt may be with 3rd party debt collectors. Pull your credit
report to see who has the account:Credit reports are free at: http://www.annualcreditreport.com
