Anyone know if closing an account that has late pays but current status will boost score? I have an account with a 90 day late that I can pay off and close (they have already verified the late twice). Wondering if closing it will have an impact at all...
It all depends on several elements of your credit. In my experience, unless the description changes from bad to good or the status is updated to reflect a better situation, the open or closed (and in most cases the balance) won't impact your FICO. So if it's 90+ days, unless it's changed to be pays as agreed or even 30 days late, you won't see a positive impact on your scores. My experience this month. I just paid a $180 collection account that wouldn't go away for anything. It updated on my report to $0 balance, but I couldn't negotiate a status change. So it shows only as paid collection. It was not re-aged or changed in any other way. It's 3 years old. No impact to my FICO whatsoever. The only way I'll get those scores up is to get it deleted.
Interesting. Mine has a current, pays as agreed status, but shows late pays in the past. I was hoping it would have less impact as a closed account, but perhaps not.
A tactic you can use is to close the account and then dispute the account as not mine or payment incorrect AFTER the creditor has stopped reporting the account regularly on your reports. Most creditors after six months to two years archive accounts and no longer have the information available to prove out the payment history. If the creditor does continue to validate after the account is closed, demand all statements and payments -- the documentation to support their validation. In most cases they will either not have it, or not want to bother with the effort and often will agree to remove the account for you. If you keep the account open, the creditor has active records and continues to report every month. If this is an account that has been open for some time, be careful. Having the account deleted potentially can shorten your total credit history and negatively impact your score. So IF you can wait six months to a year for a probable deletion, closing the account is probably the way to go.
Sounds like a plan -- thanks. I am going to close it, and then try disputing it in CHOD, I thik. I may also take a second run at a goodwill letter once it's closed. The first time around they said no. I'm hoping they will care less about a closed acount...
