Does it help my credit score to payoff a charged-off credit card from 5 years ago?

Long story short, I was young and stupid, and let a $500 Capital One credit card bill go to collections and never paid it off. Now, of course, it is damaging my credit report. My question is not whether to pay it or not, but will it improve my score enough to justify the $2500 it is reporting as due on my report? Has anyone heard of Capital removing it from a credit report if I pay them off?

Public Comments

1. I would believe so, but check this site. It will give more acurate information on your question. http://articles.directorym.com/Credit_Score-a804.html
2. Yes It would help, tremendously!
3. why is it 2500.00? when it was 500.00 they cannot charge you that much interset. i am a collector for loans and i know that if you call them since it is so old that you can get it to just about no thin cause they just want you to pay off the 500.00 the rest is a loss anyway. they write that stuff off all the time when they do there taxes so just call and tell them is there any other amount that i can pay if i pay this off all at once and there will be cause they want there money..
4. No. The harm has already been done.
5. yes
6. Since it is in collections, you will have to deal with them and not Capital One. Sometimes they will agree to take it off your credit report completely for a certain amount of money, but you need to get this in writing.
7. ABSOLUTELY, POSITIVELY NOT!!! It will drop off your credit soon as it is. What will happen if you pay it off is that you will have a NEW paid-off collection that will stay on your credit for up to seven more years. No good ever comes from paying a collection agency..the original creditor gets nothing and the junk debt buyer/collection agency makes a ton of $$ on something they paid literally pennies on the dollar for...AND, you become an easy mark, and this same debt will get sold again to another junk debt buyer. STAY OFF THE PHONE with them...they will trick you into "re-affirming" the debt, starting both the Statute of Limitations and the credit reporting clock over again. UPDATE: Make sure that the Date of Last Activity that the collection agency is showing is the same date that the account was charged off by Capital One..many JDBs will "re-age" the Date of Last Activity to reflect the date they purchased the debt, which is illegal. Get a copy of your credit report and compare it to the actual charge-off date. If they re-aged it to show it newer than it actually is, that is a Fair Credit Reporting Act violation and you can sue them for damages. Please check out the Bud Hibbs website. He has great information that you will likely find useful, and agency debt collectors absolutely don't want you to know. To add one thing to what Celeste said regarding "delete for pay"..if you go that route, get it in writing BEFORE..there are horror stories of people making deals such as these and waiting for a settlement letter that never comes and the debt gets sold and the cycle starts again. Another danger of negotiating with a collection agency/JDB is that even if you try and work it out and things fall through, you may have legally "re-affirmed" the debt. Do everything in writing and be extremely careful of what language you use.
8. Sheri does not know what she is talking about...you can settle this debt for less than you owe, negotiate it off your credit report completely. If you wait 2 years for it to fall off it will just get reassigned by capitol one to another debt collector who will try for 7 more years to collect and try to add more interest and penalties to the debt. Just negotiate and get it paid so you can get your credit back in line.
9. I have to agree with Sherri..A credit Agencies made my life a living hell..I had wrote to a collection agencies that was on my Equfax and asked for Validation of debt I received a letter back from the collection company stating That ATT Of California asked them to delete the debt from my file..Wow I thought. Then 9 months another collection company I never herd of sued me for the same damm debt.I called them and told them I never even herd of them they said oh well you knew you owed the money and the first collection company did not own the debt they did..Then I asked to make payment to settle the debt they refused..They sued 1 month before the Statue of Limitations ran out. Needless to say I counted sued them. The debt was originally was $ 714.59 the collection tacked on their fees which tallied up to almost $2,000.00. Without going to court we settled for $600.00 with a deletion off my credit file and I drop my counter suit.
10. It will not help your credit score as account will still be listed as Charged off, check this site creditboards.com.
11. paying the collection reages the debt and will lower your credit score....
12. yes, pay it off.
13. Actually no, once its been negatively reported on your credit report, paying it off won't remove the fact that it's there and hence wont effect your score. It stays on your record for 7 years after which time you can tell the credit reporting agencies to remove it. Seems like you want to boost your score, and I've got some tricks for ya that helped me raise my score from 700 points fro 500 using these steps in less than a year -- : # Know and Track Your Credit Score (be sure to sign up for the free trial of your credit score tracking listed below. It really helped my get my score up.) # Never Miss a Payment, Starting Today # Never use more than 20% of your Available Credit # Keep Credit Cards that Have No Annual Fees Open For as Long as Possible # Extend Your Credit Limit on Cards You Already Have before You Get New Ones # Get Credit Cards that Have CashBack Rewards to Contribute to your Balance # Transfer Your Balance to a Credit Card with a Lower Interest Rate and a Higher Available Credit- # If You Think You Are Going to be FORCED to Pay a Bill Late Ask for an Extension or Payment Plan # Take out a Small Personal Loan and Repay it Over a Year # Ask Someone With Good Credit if They will Account Shadow you When you're trying to build a solid credit score it's important to get a comprehensive view of what is actually effecting it... Your Credit Score (also known as your MyFico score) is calculated with the following breakdown: 35% - Payment History 30% - Credit to Debt Ratio 15% - Credit History 10% - New Credit 10% - Credit Types in Use Read more here from my blog : 10-Ways to Boost Your MyFico Score http://millionster.com/articles/debt/increase-fico-credit-score/ It's important to track your credit score while you're trying to improve it so you can see what moves are helping and which arent. Check out my links below to help you get a complete picture of your creditworthiness:
14. SCH, you don't have any idea either! Don't pay this off now. Doing so will actually do more damage. The older an unpaid debt is, the less impact it has on your credit. If you pay it off now, the activity will become current and your score will drop. Unless you can get the collection agency to agree to a "Pay for Delete" (get it in writing), then I would do nothing. It will drop off your report in 2 years anyway. And don't believe SCH, once it's beyond the 7yr. reporting period, it CANNOT be put back on your credit report; regardless that the debt has been resold to another collection agency. Also talking to the CA, cannot reset the 7yr reporting period. However, it may restart the SOL for collecting the debt. You could negotiate a settlement but unless they also agree to a 'pay for delete', don't bother with them.