I wanted to bring you all the first in a Top Ten series that I will be blogging about to inform both customers and my colleagues about in order to dispell some of the myths about credit.  Improving and making the best of your credit rating has become increasingly important with the tighter lending standards.  Don't let these obstacles get in the way of a home purchase!

Myth # 1 - When I pay off a past-due account, such as a charge off or a collection account, it will show "paid" and no longer be negative.

It is difficult to fully restore your credit without paying your outstanding debts. However, paying off a debt can actually hurt your credit. Negative items on your credit report are allowed to stay on your credit report for a maximum of seven (7) years, except for bankruptcy that can stay for up to ten (10) years. This 7 or 10-year clock begins ticking at the date of last activity. Making a payment represents new activity and restarts the clock. When paying an outstanding debt, you will change the account status to paid collection, paid charge-off, satisfied judgment, or paid ‘was x days late". This is still considered very negative and appears as though you had to be strong-armed by the credit bureau to pay the account. It is almost always prudent to have a professional help so as to not further damage your credit by trying to do the right thing.

Garren Grup, REALTOR

Delivering Information with Noteworthy Results in Naples, Bonita Springs & Estero!