How to Pay Off Derogatory Accounts for a Credit Score

Derogatory accounts on a credit report can include charge-offs, judgments and collection accounts. These remarks indicate that a debtor didn't fulfill his debt obligation to a creditor, and having derogatory information on your report lowers your credit scores. If you are hoping to qualify for a loan or negotiate better interest rates, you can talk with creditors about paying off these accounts.

Instructions

1

Get your credit reports to review derogatory information. Your credit reports supply information on your entire credit history, and these reports list any derogatory accounts that need addressing. Get free reports once a year from Annual Credit Report.

2

Take steps to pay a charge-off. Creditors may charge off an account after a six-month lapse in payments. Call your original creditor to see if you can pay the debt with the company. If so, submit your payment; or get information on the collection agency that purchased the debt.

3

Write or call collection agencies. A debt collector might purchase an old debt from creditors. While the original creditor no longer retains the debt, you can settle the balance by sending a payment to the collection company. Original creditors have contact information for the company that bought the debt, or you can check your credit report for the collector's information.

4

Face judgment orders to help improve your credit score. Judgments are left on credit reports for seven years; however, paying a credit judgment works to your advantage when applying for loans because the listing updates to "paid" once you satisfy the debt. A court orders payment, and you can submit your payment through the court or contact the creditor.