Credit Repair: Dealing With Old Accounts

Even cases of bankruptcy, unpaid accounts can remain on your records, haunting your attempts to rebuild your credit or to maintain good credit.

Many people have old credit lines that either have unpaid balances or no balances at all. These old accounts will appear on your credit report even if they have been paid in full and are closed.

After cases of bankruptcy, unpaid accounts can still remain on your records, haunting your attempts to rebuild your credit or to maintain the good credit you already have. You should obtain your credit report to determine what it contains from the past that it should not, and what you can do to remedy the negative information that it should.

What should one do about old accounts that remain on our credit reports, and therefore in our lives? The first thing you should know about old accounts is that they are not always bad. If you have a closed account on which you have no balance and a good payment history from when it was open, this is positive information that continues to work in your favor. Still, though it may take a number of years, closed accounts with no balances eventually fade from your credit history.

However, old accounts that do have balances or that have no balances but a payment history with many late payments or no payments at all, cause your credit rating to suffer. To deal with these accounts, first contact the company that issued the credit. Usually lending companies will be willing to work out a plan that fits with your budget to enable you to pay off what remains. You can also work with them to determine if, in fact, your balance with them should have been "forgiven" and used as a tax write-off for the company. If this is the case, the wound on your credit report will not be as severe as the unpaid balance, and unlike the unpaid balance, which will remain as long as the company continues to expect it to be paid--the write-off will disappear after many years.

Many people have damaging information that only amounts to a small amount of money. Upon discovering these types of old accounts on your credit report, you should pay off the balances in their entirety immediately, if that is within your means. In either case--paying off a balance right away or working towards paying it off slowly--once you have finished off the balance it is a good time to close the account if it has not been closed already. When you request that a company close your account, this is noted on your credit report.

Closing an account yourself is a better reflection upon your credit worthiness than the eventual closing of the account by the company for inactivity. It also lessens your potential for rotating balances--your credit will not be under scrutiny for your potential to run up yet another balance on a credit line that will require payments to rival other lenders. Closing old, open accounts also protects you from potential fraud that may otherwise go unnoticed because you do not deal with balances or payments on the account any longer.

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