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Negative Information

Does Paying a Negative Account “Re-age” the Debt?

Dear Experian,

Is it true that you should never pay a negative account because the credit bureaus go by the last date of activity and you are only re-aging the account?

-XYZ

Dear XYZ,

It is not true. Paying off the past due balance on a negative account will not "re-age" the account or hurt your credit scores — in fact, it could help.

Making Payments on a Delinquent Account

You didn't state how delinquent you are on the account in question, but it sounds like you may be asking about an account that is seriously past due, such as a charge off or collection. Although paying off a past due debt won't remove the negative account history, your lender will update the account status to show it has now been paid in full. An account that was past due but is now paid off is generally viewed more favorably than if it were left unpaid.

Keep in mind that when a lender writes a debt off as a loss, they may then sell or transfer the debt to a collection agency. If the collection agency also reports the debt to the credit bureaus, both the original account and the collection account will appear on your credit report as separate items. Therefore, it's best to pay the debt before it goes to collections.

If the account in question is a collection account, some credit scores may exclude the account from the score calculation once it is paid off. So, the benefit to paying off a negative account can be substantial and immediate.

How Long Does Negative Information Remain on My Report?

Many people mistakenly believe that an account is deleted based on the "date of last activity" or the date the account was last reported. However, neither of these dates have any bearing on when the account will be removed.

Negative account payment information remains on a credit report for seven years. If you are past due on an account but then bring the account current, the late payment(s) will automatically be removed after seven years.

When an account is seriously past due, such as a charge off, collection, repossession or foreclosure, the entire account will be removed seven years from the original delinquency date. The original delinquency date is the date of the first missed payment after which the account was no longer brought current.

In either case, making payments on a past due account will not cause negative information to be on the credit report longer. Bringing your payments current is the first step to getting your credit back on track.

Thanks for asking,
Jennifer White, Consumer Education Specialist

This question came from a recent Periscope session we hosted.


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