Tackle Past Due Accounts

© Derek E. Rothchild / Stockbyte / Getty Images

Your payment history impacts your credit score more than any other factor; it's 35% of your score to be exact.﻿﻿ Since payment history is such a large part of your credit score, having several past due accounts on your credit report will significantly hurt your score.

Taking care of these is crucial to credit repair. Your goal is to have all your past due accounts reported as “current” or at least “paid.”

Get current on accounts that are past due but not yet charged-off. A charge-off is one of the worst account statuses and happens once your payment is 180 days past due.﻿﻿

Accounts that are delinquent but less than 180 days past due can be saved from charge-off if you pay the total amount that's past due.﻿﻿ Beware, the further behind you are, the higher your catch-up payment will be. Contact your creditor soon to figure out what you can do to get back to current.

They may be willing to waive some of the late penalties or spread the past due balance over few payments. Let them know you're anxious to avoid charge-off, but need some help. Your creditor may even be willing to re-age your account to show your payments as current rather than delinquent, but you'll have to actually talk to your creditors to negotiate.

Pay accounts that are already charged-off. You're still responsible for a charged-off balance. As they get older, charge-offs hurt your credit score less, however, the outstanding balance will make it hard, and sometimes impossible, to get approved for new credit and loans. Part of your credit repair must include paying charge-offs.

If you pay a charge-off in full, your credit report will be updated to show the account balance is $0 and the account is paid. The charge-off status will continue to be reported for seven years from the date of the first delinquency. Another option is to settle charge-offs for less than the original balance if the creditor agrees to accept a settlement and cancel the rest of the debt.

The settlement status will go on your credit report and stay for seven years.﻿﻿ You may be able to convince the creditor to delete charge-off status from your credit report in exchange for payment, but this isn't easily done. The most important thing is to pay your charge-off and if you can get a favorable account status, it's an added bonus.

Take care of collection accounts. Accounts get sent to a collection agency after they've been charged-off or fallen behind several months. Even accounts that aren't normally listed on your credit report can be sent to a collection agency and added to your credit.

Your approach to paying collections is much like that for charge-offs; you can pay in full and even try to get a pay for delete in the process or you can settle the account for less than the balance due. The collection will stay on your credit report for seven years based on the original delinquency.﻿﻿