When Is Debt Consolidation A Good Idea?
Per your update that your accounts are already defaulted/charged-off: Paying back defaulted, charged-off credit card accounts is a tricky matter and it might not be in your best interest to pay it back, as doing so may stir up more trouble than it’s worth. Here’s why: – When a credit card is charged-off as bad debt, you need to understand that the damage to your credit is already done and there is no undoing it. Don’t make the mistake of simply cutting a check to whatever collection agency has the debt for the charge-off and assume that your credit rating will be magically restored…Doing so will not remove it from your credit reports. It will simply be updated to a “Paid Charge-Off,” which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid or not, can remain on a consumer’s credit reports for up to seven years. This does not mean that you will have bad credit for the entire 7 years though. – Renewing contact wit
