How Long Do Settled Accounts Stay on a Credit Report

The long answer is it depends on what is on your credit report. Some items can live on your report for what seems like an eternity, or they can go away in a matter of a few years after the creditors report them. To answer how long do settled accounts stay on a credit report in a short reply, it’s seven years.  

Still, there’s no sense in worrying about it. It’s not all bad news. As time goes on, the negative items don’t carry as much impact as they did in the beginning. If you settled a debt a few years ago, then you have a few more years to go yet, but not as many as before. But do you know what a settled account is? Should you have looked into a debt consolidation loan before settling? Let’s find out. 

What Is a Settled Account?

Usually, when someone settles, it is not what’s wanted, but it can be accepted. When it comes to lenders, they agree to a figure less than what a debtor owes to get some form of restitution. Some people may look at this agreement as less than favorable because it’s not the original commitment, but not everyone thinks this way.

Other lenders will treat the settled account more favorably than one that is ignored. Here, some money is better than no money. The only catch is that when you apply for other credit, the new lenders may require you to take care of this debt in full before extending an offer of credit. How you settle this account is up to you and the collections department. With any luck, you will come to an amicable agreement and get approved for a new line of credit or a debt consolidation loan. 

Settled Accounts vs Debt Consolidation Loan

If you have a history of paying late, it will show on your credit report. Lenders report this information consistently and the results stay on your report for seven long years. The date you stopped paying on the account is the original delinquency date, and that’s what creditors use when they report this information. 

Although one may think that settling an account as something negative, it’s not as bad as not paying anything at all on a delinquent account. It shows you acknowledge you made debt and you want to make restitution. This will also bring up your credit scores, so think about a debt consolidation loan before you quit paying on a loan or credit card debt. It may be more beneficial to you. 

Some people even settle accounts in good standing. However, before you do this, talk with your lender or visit freedomdebtrelief.com for debt consolidation loan information. There may be other options available to you instead, and it will keep your payment history intact. 

Remove Settled Accounts Ahead of Time

There may be a chance to have a settled account revisited and read as paid in full. Would you like that? Yes, most people would. It’s possible if you’re willing to make an offer they can’t refuse. See if the collections department will accept a partial payment of the total balance. If not that, then increase the last offer to pay.  

It’s always best to make payments on time, even if you have to defer a payment or two. It’s a favorable gesture if you’re rebuilding your credit or considering a debt consolidation loan. 

Your Credit Report 

If you’re thinking about a low-interest debt consolidation loan or debt settlement, chances are you have missed a few payments. If this is the case, you’ve already seen a drop in your credit scores. However, regardless of whether they took a turn downward, you can still rebuild. How long do settled accounts stay on your credit report? Although it’s seven years, you’ll now show on-time payments and the negative items will grow older and eventually fade off the report, leaving positive remarks with new credit ratings.