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bean221

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How long will a derogatory mark from a closed credit card remain on you report?
I have 3 accounts from the same bank company that were closed due to non payment by the company, "closed due to bad debt" as stated in remarks. It is from a line of credit and credit card from a long time ago that I forgot about when I moved overseas. I have come back and was going to try to resolve the debt, but it says it is closed. It was opened more than 7years ago, but was last reported January 2016. Is there any way to resolve it with the bank if I contact them? Will they continue to report on it to keep it on my report forever? Will it ever drop off my report?

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bad debts

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normally it drops after 7 years when it comes to bad debts. the thing is when they reported the debt as a bad debt. if you believe it had been on your report once and can prove it had been they will remove it. you have a statute of limitation when it comes to collesting a bad debt. you also have to watch those collection companies too, because they will sell off bad debt they can not collect on. they have to prove they have obtained the debt from the original creditor.

Reply by
bean221

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I do not believe it has been sent to collections yet. I can't tell if they have reported it as bad debt prior to this January, but i will try to find out. I'm hopeing to reach some sort of settlement with them directly so they can remove the derogatory mark. 

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Should clarify - it will stay there for 7 years from the last activity on the account. 1/2016 means if left alone and not updated, it will remain until 1/2023. 

If it's a small amount, you might be able to contact the creditor and negotiate a 'payment for removal' in which you pay off the debt in exchange for them removing the derogatory remark.

Reply by
bean221

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Thank you for the info. I think I will try to contact the original creditor and try to negotiate a payement for removal. I didnt even know I could do that. It's not a huge debt, about $4000. I would think they'd rather get their money back. I assume I'd have to get everything in writing stating that they will remove the derogatory mark in exchange for payment. I really don't want this on my report until 2023. It's my only derogatory mark. I have 3 small debts in collections, but can easily settle them. I dont want this one to haunt me forever.

Slightly off topic, once you settle a debt in collections how does the status of the debt change? Will it show up under collections still or will it be removed immediatly after settlement? And how soon will it improve the credit score? 

Thanks!

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Reply by
Random789644

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After the thing is paid off, if you were successful in getting a 'payment for removal', they simply mark the account as closed, and remove any derogtory statements. This turns it from a derogatory statement into a neutral one. 

Not 100% sure if the payment history will remain intact on it, but I suspect it will.

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7 years from the date of last activity - if it's been there longer than 7 years from the last activity, you will likely have to dispute it.

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