How Should You Handle Accounts That Are Past Due?
Taking care of past-due bills is part of the process of repairing your credit. These overdue accounts have the most influence on your credit score since your credit history has the greatest impact on your credit score. Payment history, in fact, accounts for 35% of your credit score. Age is the single most important factor influencing your credit score.
Account Types of Past Due Accounts
There are various forms of delinquencies that might harm your credit score. Past due accounts might include accounts with late payments — the normal increments of late payments are 30 days, 60 days, 90 days, 120 days, and 180 days. Every month that you are late on your payment, your credit record is updated with a 30-day late notice.
Accounts that have gone more than 180 days past due, or six months past due, are classified as charged-off. Though the term “charge-off” may lead you to believe that you no longer have to pay these bills, this is not the case. A charge-off is just an accounting word that indicates that the accounts have been written off as uncollectible. They will, however, continue to try to collect on these accounts.
Debt collection accounts are those that have been assigned to a collection agency. The original creditor has given up on collecting payment from you and has enlisted the assistance of a third-party firm. Judgments, tax liens, repossessions, and foreclosures all appear in your credit report’s public records section and have a negative influence on your credit score.
These delinquencies involve the court and may be difficult to remove from your credit report as long as the court record exists.
How to Restore Overdue Accounts
There is no one method for resolving past-due bills. To get rid of them, you’ll need to employ a number of strategies. Finally, you may be able to remove some of the past-due accounts from your credit report, but not all of them.
Dispute with the credit reporting agencies. The credit report dispute process is usually the initial step in removing material from your credit report. Credit agencies are obligated to erase material from your credit report that is erroneous, incomplete, or unverifiable. If you have evidence that a credit report listing is incorrect, you can utilize the dispute procedure to get your credit report amended.
Request that the corporation re-age accounts that have not been charged off. You can negotiate to have your account brought current if it is fewer than 180 days past due and you can pay the total outstanding sum. In exchange for payment, request that your creditor remove previous past due notices from your credit record. In exchange for cash, negotiate a deletion swap.
You’ll need to talk to the correct person in the firm to do this. Lower-level customer service employees and bill collectors are frequently unable to remove entries from your credit record. Make an effort to speak with someone who is.
To have public documents such as foreclosure and repossession removed from your credit report, you may need to engage with an attorney. If you can demonstrate that there is something suspicious about the entry, you may be able to effectively delete it from your credit report. The difficult aspect is identifying the requisite gaps. That’s where an attorney who is familiar with your state’s laws comes in.
Be wary of credit repair services that may employ unlawful or unethical ways to clean your credit record. Check with the Better Business Bureau to ensure you’re working with a reliable credit repair firm.