Credit debt and score
I am asking for a friend. He wants to buy a home and wants to payoff an old debt with creditor. He called to pay it off but the creditor had sold the debt and he cannot get anyone to answer at this place. His credit score has now dropped 160 points. Any avenue he can take?
Terry Says
No. Once this debt has been sold and reported as a “charge-off”, there is no benefit to paying it off. It will stay on his credit report for several years, impacting his score. All he can do now to raise his score is use his longest-held card, charge monthly, and pay the monthly bill IN FULL AND ON TIME.
He will pay a higher mortgage rate if he can get approved now — but might have a chance to refinance in the future when his credit score is higher.
