Wrongful Credit Damage, Identity Theft and Debt Collection Abuse Blog

If you owe a debt which was charged off years ago, DO NOT–I REPEAT, DO NOT–let a debt collector talk you into making a small or token payment on it.

The debt collector will lie to you and tell you that it will “improve your credit”.  This is a lie.  It’s already charged off, and because it’s an old debt, it probably has a minimal impact on your credit score anyway.

WHY DOES THE DEBT COLLECTOR WANT YOU TO MAKE A MINIMUM PAYMENT ON THE DEBT?  BECAUSE THEN THE DEBT COLLECTOR CAN “RE-AGE” THE DEBT AND CONTINUE COLLECTING IT FOR ANOTHER SEVEN YEARS PLUS SIX MONTHS!

It works like this: a charged-off debt can not be reported to your credit report after seven years and six months from date of charge-off.  It will, in effect, disappear from your credit report and will have no further impact on your credit score.  However, if a debt collector can persuade you to make a token payment, this constitutes “activity” on the account and the seven-years-plus-six-months time period starts over again from the date of your payment.  You have just subjected yourself to another prolonged period of collection calls from jerk-off debt collectors.

This is particularly unfair when debt collectors buy really old debt.  Debt collectors are desperate out there these days and will buy debt that is 15, even 20 years old which can no longer be reported to your credit report, UNLESS YOU SHOW MORE CURRENT ACTIVITY ON THE ACCOUNT BY MAKING A TOKEN PAYMENT!  When you make such a token payment, you hand the debt collector the keys to the kingdom.  Viola!  The debt collector can now report the debt to your credit report again, to pressure you into paying it.

So, the moral of the story is: DON’T LET ANY DEBT COLLECTOR TALK YOU INTO MAKING ANY TOKEN PAYMENTS ON OLD ACCOUNTS!  Let those old accounts be.

Hope this helps.