We have remarked many times all over this blog that settling your debts and paying off your outstanding credit is the best way to improve your credit score. You can manage to do yourself what any credit counseling service will help you and advice you to do. The primary steps that any credit councilor will take in order to repair your credit is to cut down your expenses, increase your disposable income so that you can start paying off the most current and urgent of debts. You can however undertake this procedure yourself.
The two obvious advantages of settling an account with a creditor is that not only do you get to improve your credit score but also you are likely to settle the amount for a much lesser sum than what you actually owe. This is especially true in case where your debt has been written off as a bad debt by the creditor. Writing off any debt has a bad debt means that the lender is including it as a part of his losses and does not expected to recover any of that money. This fact however is limited by the amount that you go to the creditor in the first place. For the lender to be anxious to reach a settlement amount which is less than the original sum, the money owed to him by you should be substantial enough for him to be willing to go through the trouble and the compromise.
The creditor has in its power to either delete the negative transaction from a credit history or change the negative transaction to a positive one. There are several ways in which he can manage this.
The next time that they sent information and to the credit bureau they can delete your information on their records or show the debt as having been settled. The thing to remember here is that whenever a payment that is played by more than 30 days is recorded to the credit bureau, such a record stays on a credit report for a period of seven years from the date of the first delinquency. While the creditor may be able to update the account status from showing late to showing that it has been paid off, he may not be able to be raised a record of the missed payment altogether.
The creditors have the access to your account with the credit bureau which is linked to the creditor’s computer. They can pull up your account and make the necessary changes. By using a change of information slip authorized person can send the collected information to the data acquisition department in order to update your file.
The creditor can also change the information by submitting information to the consumer relations department of the National credit bureaus. This method cannot change a negative transaction to a positive one but can only delete the negative information from your credit history.