Does paying off past due accounts neutralize their negative status?
No. Paid, once-delinquent, debts still show up as severe negatives. A past delinquency, collection activity or charge off does a great deal of damage to the credit score, even if paid off. One of the great ironies of the credit reporting system is that paying your past-due debts actually makes the score worse, however, after 2-3 months the score will slightly rebound and increase.
