Repairing Your Credit? Focus on Factual Errors!

I’ve taught a lot of credit workshops in 2015 thus far and a question I often get is “How should I dispute?”  My answer is always the same; focus on factual errors.

And then I’m met with a blank stare, LOL.

So what does ‘factual errors’ mean?  Well, let’s go over what factual errors is not.

What most people do is simply dispute every negative item on their credit report as ‘not mine’ to see if it’ll be deleted.  Others will falsely claim that they are a victim of identity theft and demand deletion of negative items on their credit reports.  And yet others will identify a part of the credit tradeline that is reporting – balance, dates, etc – claim it’s inaccurate in hopes that it won’t be verified and will be deleted.

If you notice, the above strategies are a shot in the dark; and the first two are straight up fraud!  I used to get asked to dispute accurate, factual items for people all the time, and the answer was always NO!  I’m sorry but if I’m going to get fined or threatened with jail time it’s going to be for something that benefited me; not you and your credit.

If you want real results you want to focus on factual errors.  This involves really looking at the item on your credit reports to see if there is a true error.  Remember, the Fair Credit Reporting Act (FCRA) allows you to dispute anything that is inaccurate, incomplete, unverifiable, and untimely.

Locating these factual errors can quite simple with a little patience and practice, especially if you have documentation to compare the items on your credit reports to.  To add, almost 80% of credit reports contain errors that need to be removed/updated.  You read that correctly EIGHTY PERCENT!!!  Finding some type of error shouldn’t be too difficult.

So, being able to read your credit report is important, but so is examining it carefully, using the questions above, to find these inaccuracies so that you can create a solid plan of action to dispute them.

I have a list of common inaccuracies listed here to assist you.

I’d start with the first negative credit account on your report, look at it carefully and ask, is it accurate?  Checkeverything!  Dates, statues, type of account, balances, etc. and match it up against what the other bureaus are reporting and your own documentation as well.

Next, is it complete?  Are any dates missing, account numbers correct, the company reporting the information, contact information, credit limits?  This is actually the most common reason for dispute you’ll find.

Is it verifiable?  This is the most time consuming to find out.  You are going to the company reporting this information to ensure they have documented proof with signatures (paperwork and accounting trail) that verifies what they are showing on your credit reports.  If the company reporting the information can’t verify it; how can the credit bureaus?  Another approach is to see if the credit bureaus can verify the account?  You’ll want to obtain documentation for the method as well.

Is it timely?  Per the FCRA, credit reporting agencies must remove your inaccurate items 7 years from the date of first delinquency or filing date for public records (exception:  10yrs for Ch7 bankruptcy and 7yrs from date of release (payment) for federal tax liens).

Now that you’ve made your notes and marked up your credit reports, now what?

It’s disputing time!

If you need dispute letter templates with instructions on how to write your own, check out my Dispute Letter Package in my store!

Items that are less than 24 months old will bring you the biggest increase in your credit scores; so you can certainly focus on those first.  Ultimately, however, if it’s negative and inaccurate, remove it.  With my DIY Credit Empowerment Package, I encourage participants to start with the easiest items first so that they can get some positive results right away, which gives them the resolve to tackle the most difficult items shortly afterwards.

Yes, analyzing your credit report will take some times but it brings about results quickly because the items are legitimately incorrect.  Afterwards, you can focus on other areas that can soar your scores, thereby speeding up the credit restoration process – namely adding positive accounts (if needed) and improving your debt utilization ratio so your revolving accounts are reporting less than 25% of your available credit limit; and maintaining positive credit management.

So, when working on improving your credit – keep your disputes factual!

And, if you need assistance pinpointing the areas you should concentrate on, schedule a Credit or DIY consultation, and I’ll get you pointed in the right direction :).

Hope this helps!

~ Netiva

What To Do When Bad Credit Comes Back

Every one LOVES when they are successful in getting negative items removed from their credit reports.  It is pure nirvana!  The Number One question I am always asked is what will happen if it comes back on?  Well this will happen:

  

This actually came from someone that attended one of my Credit 'Power' Workshops.  She was able to get 12 collections removed using the information she received and 3 of them came back.  The reason why it caused such a catastrophic drop to her score is because the FICO scoring system viewed them as a brand new collections (explained further here).  So, what do you do when bad credit comes back?

The Dispute Process

When we dispute information on our credit reports we are exercising our consumer rights under the Fair Credit Reporting Act (FCRA), Section 611 to be exact.  Here, it let's us know that our credit reports should be 100% Accurate, 100% Verifiable, & 100% Timely.  If any of these factors are missing, the item must be deleted.  The law gives the bureaus and the company reporting the adverse information 30 days to investigate and if they are not able to do so, the item must be deleted. Similarly, if the bureaus do not hear anything from the creditor by day 30, the item must be deleted.

When Deleted Items Are Reinserted

When bad credit comes back, in most cases, a creditor will contact the bureaus and verify the legitimacy of your debt sometime after day 30, which will result in the bureaus reinserting the credit item back on your report.  This is perfectly legal.  However, specific guidelines outlined by the FCRA must be followed.  I'll explain.

Per FCRA Section 611(5)(B) Requirements Relating to Reinsertion of Previously Deleted Materials; the creditor who is reporting the information to the bureaus must certify that the information they are giving them is 100% complete and accurate (Certificate of Accuracy).  The credit bureaus must also notify the consumer (you) in writing no later than 5 business days after they have reinserted the item back on their credit report. The written notice must include a statement that the disputed item is being reinserted and provide the contact information (name, address, telephone number) of the business that has verified the item so that you may reach out to them for further dispute/information; they'll also state that you can write a 100 word statement to place in your file.

What I Recommend

1.  If an item has been reinserted on your report and the company furnishing the data to the credit bureaus completed a Certificate of Accuracy; ask to see it.  Section 607 of the FCRA is pretty clear about the bureaus having to maintain accuracy and if a consumer requests to see documentation proving that the items on their credit report have been verified for accuracy and timeliness, they are required to provide that information to us (Section 609).

2.  Dispute with the company reporting.  If it is a Collection Agency that has verified the information, send them a validation letter asking for copies of everything that they have proving that you are liable for this debt (sample letter found here).  If it is an Original Creditor, send them an Investigative Letter, asking for documentation of your history of the account from the moment it was opened to when it was closed. Per Section 623 of the FCRA, you are able to do this

3.  Ask to see the procedures the bureaus use in preventing the reappearance of negative information on our files.  Per that same section in the FCRA (611(5)(C)); the bureaus should have procedures in place to prevent this from automatically happening and ruining a consumer's credit rating. Why do you want to see it?  To see if they followed it.  If they didn't even follow their own procedures AND failed to follow the procedures outlined in the FCRA, you have a nice FCRA violation suit to prepare.

4.  If you never got the written statement of reinsertion, re-dispute with the bureaus.  Simply tell them they are in violation of FCRA (611)(5), and to permanently delete the item.

5.  If you owe it, negotiate a settlement or pay in full in exchange for a deletion of their reporting to the credit bureaus.

TIP:  Compare a new credit report to the old credit report to see if all of the information is the same.  In the case above, one of the collection agencies reported the exact same debt under a different account number, sneaky right?  But remember, their job is to use every method possible to get you to pay that debt and ruining your credit rating is a good motivation for consumers, especially if they're looking to make a purchase soon.

This particular client ended up sending validation letters to 2 of the bureaus and a dispute letter to the bureaus for the 3rd one and all 3 were deleted.  Her scores have been restored and more because she's building new positive lines of credit as well.

Hope this helps!

A Credit Score Drop & Your Reporting Date

There is nothing more irritating than increasing your credit score and then seeing it drop significantly months later.  When this happens, you review your report thoroughly to see if there are any new negative items reporting, only to find that a rather old item has all of a sudden started to report again!

Yes, this is legal, as long as it is within the federal reporting time frame they can report whenever they like; reporting activity to the credit bureaus, is after all, a form of collection activity.  

Your reporting date is simply the date that the creditor reported information to the credit bureaus about your credit-relationship with them.  If they are updating every month your credit score will not be adversely affected as much as indicated above. 

FICO/Vantage and any other scoring model will factor the negative item based on the type and the age.  So, the scoring system will recognize the item; if its old it won't affect your score much, if it's new it will, but as it ages it will have a lower and lower affect on your score. By a creditor reporting the debt on a monthly basis, FICO will continue to view the item as a new account and it will prevent your score from climbing as much as it could. You can still achieve a decent credit score; but it will not increase as much with the negative account updating on a regular/monthly basis.  

The good thing is that whether they continue to update it or not; the bureaus will still delete it based on the Date of First Delinquency (the date you became late on the account and never brought it current again) no matter how regularly the creditor reports it on your credit; similarly, your state's statute of limitations will remain unaffected as well.

But, what happens when an older item; say 5yrs old, all of  a sudden starts reporting again?  Exactly what the picture depicts above.  The scoring system will recognize it as a brand new negative item and your score will drop immediately.  After a while, the system will get over it's initial shock, recognize the age of the negative item and your score will adjust.  If the creditor continues to report on a monthly basis, the adjusting can take much longer as again, the scoring system will recognize it as a newer debt and it will negatively affect your score as much as it did when it was originally furnished to your report.  

In this client's case, the debt will be deleted in June of 2015; so we're going to let them sit tight. The state's statute of limitations on this debt has passed so they are banking on this drop prompting my client to call them up and make payment arrangements on a debt that is time-barred; slick right? But, it works all the time to those possessing little credit and collection knowledge. But now you know!

If your debt still has a few years left of reporting time; both federal and state; you have a few options:

1. Dispute it
2. Pay them (if collection agency, Validate First!)
3. Settle
4. Wait it out; they usually stop reporting anyway as the debt gets older
5. Keep your other/newer credit items squeaky clean - paying on time, keeping all balances super low. Although negative items factor into 35% of your score (Payment History); 65% of your score (Payment History/Amount Owed) is based on how well you manage the credit you currently have.

Hope this helps!

Let me know if you have any questions!!!


~ Netiva

How To Remove Inquiries From Your Credit Report

When reviewing our credit reports, we often go to 2 areas first - the Adverse (negative) area and the Inquiry area.

In the Inquiry section you'll find 2 types of inquires:

1. Hard Inquires - The type of inquiry that negatively affects your credit score.

When you complete an application online, over the phone or in person granting a lender permission to pull your credit report in hopes of obtaining a loan of some sort, this is a hard inquiry. This type of inquiry applies to credit cards, lines of credit, car loans, home loans, etc.

For credit cards, each inquiry will result in a Hard Inquiry. For student loans, car loans, and mortgage loans, and apartment hunting FICO allows you to shop around for the best rate. As long as you do your rate hunting within 45 days you'll only be 'dinged' once for the inquiry. So.. to avoid lowering your score, make your decision relatively quickly.

2. Soft Inquiries - The type of inquiry that does not affect your credit score.

On your credit report Soft Inquires are listed as Account Review and Promotional Inquires.

Account reviews are when you pull your own credit report and when creditors that you already have a relationship with pull your credit report. 

Promotional inquiries occur when a business checks your credit report in hopes of offering you their product/service; this is completely legal as long as their inquiry is marked as 'Promotional' on your credit report. You can prevent this access, however, by visiting www.optoutprescreen.com and opting out.

So, how do you get the Hard ones off?

Well, keep in mind inquiries affect very little of your credit score and by the time you have gone through the dispute process, the effects of that inquiry has more than likely faded. And as far as credit repair goes, they are the bottom of the credit disputing train.

When a client comes to me with late payments, collections, public records and over-utilized credit accounts; I'm focusing on those first. Payment history is 35% of your credit score; Utilization is 30% of your score, those inquires account for less than 10% of your score. Obviously, tackling the 'big' items makes more sense.

I personally only focus on removing inquires if my client has been a victim of identity theft or if a company has truly pulled their report without permission; meaning that the inquiry might lead to future identity theft.

However, I will say that a hard inquiry can drop your score as much as 10pts, and if you're looking to make a credit-based purchase, disputing an inquiry for those few points can make a difference. Keep in mind that disputing an inquiry will result in a Fraud Alert being placed on your credit.  A fraud alert will tell a business that they must verify your identity first prior to issuing any form of credit.  It lasts for 90 days, so if you're in the process of rebuilding you may experience a delay in getting approved for any form of credit; this doesn't mean you'll get denied, but you may get something in the mail or a phone call asking for hard copies of your personal info (ssn card/ID,etc).

To remove an inquiry you can either dispute with the creditor that has it listed or directly with the credit bureaus. With the original creditor you'd have to approach it as a 'Remove As A Good Will' or 'Remove Because I Never Authorized This Transaction' (often referred to as a Good Lie Letter if you really did give them access to your report).  If you choose the latter, it will only work if the lender does not have documentation with your 'wet' signature or recorded telephone conversation where you clearly gave them permission to access your accounts.

To dispute with the bureaus you'd have to take the 'Remove Because I Never Authorized This Transaction and Therefore They Did Not Have Permissible Purpose' approach.' Credit bureaus cannot give just any company access to our credit information. The business must have 'permissible purpose'.

Permissible purpose is defined in detail by the Fair Credit Reporting Act, Section 604. Basically if we did not give written permission, if credit access was not court ordered, or requested by a State/Local government agency in relation to child support, the company shouldn't have access to our credit information. Prior to placing any inquiry on our credit report; the bureaus should have proof that one of these events took place.

I'll post popular templates of Inquiry Removal Letters below; please Google other examples when forming your own inquiry dispute letters. You guys should know my motto by now, the best dispute letter is a personal, customized one in your own words :) For more info on goodwill letters click here.

If you need assistance pinpointing the items that are negatively affecting your credit; please feel free to reach out to me; I'd love to help!

~ Netiva

Original Credit Inquiry Removal Template:

[Your Full Name]
[Current Address]

[Creditor's Name]
[Creditor's Address]

RE: Unauthorized Credit Inquiry

To Whom It May Concern,

This letter is a notice to cease unauthorized inquires into my credit report and a formal demand that you immediately contact the credit reporting agencies and bureaus to have your illegal inquiries removed. While checking my personal credit report from {insert Credit bureau name}, I noticed an inquiry made by your organization.

The details of the inquiry are as follows:

Line number: [Line Number]
Inquiry made on: [Inquiry Date]
Inquiry made by: [Creditor]

To the best of my knowledge I have not approved your organization, any person associated with your organization, to make such an inquiry. This violates the Fair Credit Reporting Act, Section 1681b(c): Transactions Not Initiated by Consumer. I also demand that you remove my personal information from your records. Please send written confirmation that you have complied.

If you believe that you posses sufficient document that supports your authorization to make the inquiry, please forward a copy so that I may verify its validity.

I am using certified mail to ensure that you receive this letter and expect a prompt response.

Regards,

[Full Name]


Credit Bureau Inquiry Removal Template:

Date

Your Name
Your Address

Credit Bureau
Credit Bureau Address

To Whom it May Concern:

I recently pulled a copy of my credit report and noticed the following information are in error:

RE: Inquires

The FCRA states that the only permissible purpose for pulling someone's credit report is a) firm offer of credit b) insurance c) employment or d) a court order.

The following inquiries are related to none of the aforementioned permissible purposes.
1. ABC Banking
2. Midwest Credit Card
3. FindYourLuck Shopping

Please remove these inquiries from my credit report. I have enclosed a copy of my driver's license as proof of identity.

Sincerely,

Your Name

The Power of the Goodwill Letter

When I inform my clients that I am going to write a letter of goodwill asking their creditor to erase negative items reporting, I get 1 of 2 reactions:

A: I already asked and they said No, or
B. And I’m paying you for this?

The latter is always entertaining. I have had a decent amount of success with goodwill letters; it’s a low risk, high return approach to removing derogatory information from your credit reports. I've had items from Sallie Mae, Chase, Capital One, Barclay and plenty of others on both revolving and installment accounts using this method. As with anything, they are not guaranteed. But do give it a try!

Here are a few tips to write your own.

The most important thing to remember is that you are asking for a favor; thus goodwill letters should be a ‘Please Baby Baby Please!’ type of letter rather than ‘Delete Immediately Or I Will Sue!’ type of letter. They should go out to Collection Agencies and Original Creditors only; credit bureaus and public record officials will laugh at you hysterically if you send them a goodwill letter. Remember to be pleasant, personable, and to state the specific change(s) you would like them to make to their account listed on your credit report. Again, you are asking for a favor.

What type of accounts are best suited for the goodwill method?
Late Payments on Open and Closed Accounts, Paid Collections, Paid Charge-Offs.

If you haven’t brought the account current, settled or paid the account off in full you can forget it. The idea that a company will remove or update an item when they still haven’t gotten their money is pretty much not gonna happen. Has it been done? I've heard it has but I sure haven’t experienced it!

Writing the Letter
The best letters are those that make the person reading it feel good about deleting or updating an item for you. They want to help you succeed in improving your finances, they want to ease your woes by giving you a bit of good news among your sea of bad events; they want to believe that you've learned your lesson and shouldn't suffer for the next 7 years for your past money mishaps.

When forming your letter, be sure to include the account number, your name and the address that you had when the account was open (if you have it) so that they can easily look up your account. Obviously, if the account is still open this is a given. And please do not use a template found on the Internet. How sincere are you being by using the copy and paste functions on your keyboard?

Customize the letter; personalize it; I've even had clients include a picture of their kids and write how they want to purchase a home for them but the negative reporting is hindering them from obtaining a loan. If you need a general idea of how to formalize your letter; do study the template; but nothing else. DO NOT COPY AND PASTE!

Write of how you got into this predicament: Death in the family, divorce, job loss, medical illness (yours or immediate family member), disability, etc. Let them know that you didn’t willfully let the account go into arrears and the steps you took to try and avoid the late payments, charge off, etc. Also detail what steps you are taking now to ensure that it won’t happen again (especially important if the account is still open).

Lastly, inform them of what you want them to do – “remove the late payments”; “remove the charge off”; “delete the collection”, “change the remarks”; etc.

How to send the letter?
The letter should go out regular mail or first class mail; no need for certified mail as it appears too formal and technical; you’re going for a more personal feel. I’ve had a good deal of success doing the following:

1. Calling and ask. The customer service rep on the phone will typically say No, which is why you need to escalate the call to someone who does have the authority to make that decision.

2. If denied, mail a letter personally addressing it to someone higher than the person I originally spoke with (this is usually available on their website or by calling and asking; press releases are very informative as well),

3. Wait 2-4 weeks for a response, follow up with an email (again press releases or planetfeedback.com) or telephone call; fax works as well.

By now I have most certainly gotten my yay or nay; but please believe 30-60 days later I’m asking again.

Who to address the letter to?
With the initial letter, I’ve addressed the letter to a specific person (president, customer service manager, CFO, etc) and with a general “Dear Sir/Madam” salutation. Both work, neither sticks out as having more success than the other so whatever works for you

The only time I’ve addressed the letter to a specific person is when I was denied by a supervisor and/or manager and needed to escalate my request to a higher executive. Now, that works more than Dear Sir/Madam.

NOTE: If you are starting with a letter rather than a phone call, then you definitely want to do some research on who the Senior Agents, Supervisors, or Managers are over the department. If your account is closed, the regular customer service department may no longer have your account. The easiest way to do this is to call. Your other options include looking on their website, their company directory, or researching via Google.

Typical Response?
I will usually get a letter of response with either an acceptance or denial. In some cases I don’t get a response at all, the deletion or update will just show up on the credit monitoring service.

One denial that’s pretty common is “It is illegal for us to report untrue information to the credit bureaus”. I completely ignore this, any information furnished to the bureaus are completely voluntary; there is no law stating a company has to report anything to the credit bureaus about us. So, if they decide to remove negative information early they are completely within their legal rights to do so, and we are within our legal right to make the request.

It is important for me to say that you be very specific on what you want them to do. I have heard of creditors deleting information that needed to be updated, resulting in scores lowering due to the age of the account and a drop in credit utilization.

Overall, the worst thing that could happen is a big fat NO. But don’t fret, be patient, and just keep trying!.

Hope this helps!

Think Before You Open That New Credit Card Account

December marked the spark of thousands of new store credit cards opening up in addition to Bank Credit Cards as all types of temporary incentives were given to woo consumers - from 10% off; 0% interest to cash back rewards. Did you fall victim to this as well?  

It's often said that you should not open credit accounts unless you need them; don't do it just to build a credit score.

I disagree with that. You can't get the credit accounts you 'need' if you fail to open up credit accounts for the sole purpose of just building credit. Can you buy a house without some form of credit already established? A car? At what interest rate/terms? I DO agree that you should not open credit unless you need it and that includes building credit. I DO agree that you should not open new credit just to get a discount.

However.... before you open up that new credit account, weigh the benefits/consequences:

10% of your score is based on New Credit - that's mostly negatively, not positive. FICO weighs:

• How many new accounts you've opened in the past 6-12mths; 
• How many new accounts of the same type you have opened (so if you have too many new credit card accounts, for example, this can be viewed negatively); 
• How many inquiries you've had in the past 12mths; and how long it's been since you've opened up any new accounts. 
• Payments made on an account bringing it out of a negative status to positive (This positively impacts this section of your score) 

So, when you apply for a new credit account; the first thing that happens is a hard inquiry - that's negative. If approved, you'll have a new account on your report that will affect the first bullet above, New accounts opened in the past 6-12 months - that's negative. If you already have too many accounts of the same type - that's a negative. Another negative is something called the Average Age of Accounts; this is apart of the 15% calculation of your score called Length of Credit History. One of the major things it takes into consideration is the average of older accounts and newer accounts; so if you have a pretty long history; when new accounts are opened the Age of your Accounts are shortened.

So, what's positive about opening new credit?

Well, your Debt Utilization is increased. Debt utilization is apart of the Amount Owed section of your score, which makes up 30% of your score. When you have more available credit than you have used (amount you have spent) credit; that is a positive. Just looking at the percentages, 30% is much higher than 10%, right? So, obviously if you can benefit from having more available credit, then it's worth the temporary ding in your credit score. To add; once you start paying on time over the next 6-12 months you'll see a sizable boost in the Payment History section of your score as well; which makes up 35% of your overall score.

Therefore, if you open up new credit the negative impact will be short lived as you keep your balances low and pay on time over the next 6-12 months. If, however, you open a new account and spend over 30% of the available credit and make late payments; your score will tank significantly. Credit is based primarily on our habits - 65% of our score takes into consideration our paying habits and how much we owe nn our credit; revolving accounts (credit cards) in particular.

Hope this helps!

If A Debt Is Written Off, Do I Still Have To Pay It?

The term ‘written off’ can be misleading, especially if both the terms ‘charged off’ and ‘written off’ appear in the same credit trade line on your credit report. So, it’s good to know the difference, as the two are often used interchangeably.

A charged off account means that the creditor has removed the debt from their accounts receivables and charged it off as a loss due to lack of payment; this usually happens between 90-180 days of non-payment depending on the type of account. A charge off reduces a creditor’s earnings and their tax liability, which is the point of reclassifying the debt so that the income the lender gets taxed on is exclusive of uncollectable debt. The account is closed for future charges, however the debt still remains due. Charging off the account doesn’t mean the creditor doesn’t expect to ever get paid, it just means they haven’t been able to collect payment as of the date of the charge off. This is why the balance owed on the account will still reflect on your credit report.

After the account has been charged off the creditor has a few options:

· Transfer the account over to their internal collections department, if applicable

· Assign it to an outside collection agency, but keep ownership of the debt

· Sell the debt to a debt buyer/collection agency

A debt that has been written off can mean one of 3 things; A) it has been forgiven, B) the value has been reduced, C) the profits have been reduced.

The only way to truly know if a debt has been forgiven is if you receive a 1099, if you haven’t received one don’t be afraid to ask for it. You’ll have to potentially pay taxes on the debt, but it’s a heck of a lot cheaper than having to pay the debt in full or having to go through litigation for a money judgment proceeding.

In regards to options B and C; a credit card debt, auto loan, mortgage are examples of assets to a creditor. So if you are in arrears and the creditor feels they won’t be able to collect on the entire debt, they’ll write off all or a portion of it in order to reduce the value of both the company and the profits so that they can get a tax reduction, or because they have paid taxes on the profit already and want to get their money back.

Now, looking at the two definitions they look the same right? Both are for accounting purposes only. The difference is that when an account is charged off it means ‘not collected/uncollectable’ and a write off means ‘reduction/loss of value/profit’.

And interestingly enough, if you have not gotten a 1099, a written off debt can still be collected and sold. It does not matter if a debt is written off or charged off you are still liable for payment of the debt. If the debt has been canceled (1099) after it has been written off or charged off, you may be liable for taxes for the unpaid amount.                                   
                       
There are things to consider prior to deciding if you’re going to pay a debt or not and a ‘written off’ or ‘charged off’ status is not one of them.

State law mandates how long a consumer can be held liable to pay a debt. Each state sets their own time limit that a creditor has to sue a consumer for a judgment for repayment. Once that time limit has expired, a consumer can use the expiration of their state’s statute of limitations (SOL) as a defense against most collection activities.

It’s important that you do not do anything to restart this time frame. Most activities include making a payment or agreeing in writing or verbally that you are responsible for the debt. So, if a charged/written off debt is close to being expired due to statute of limitations, I’d suggest not making a payment.

Something else you want to look at are the remarks/status. Is it still with the original creditor? Has it been transferred? Sold? Is a collection agency listing the same debt? The last thing you want to do is make a payment to the wrong entity.

And finally, please take into consideration that paying a debt that is written off, charged off, or in collections will do absolutely nothing for your credit score. The damage of the status (charge/written off; collections) has already been done. Having ‘Paid’ in front of the negative status will do absolutely nothing to improve your credit score.

Hope this helps!