Most lenders and creditors write off an account as a bad debt six months after it becomes delinquent. That doesn’t get you off the hook for paying the money you owe, as the debt will appear on your credit report as a charge-off. The creditor can then turn the account over to a collection agency. Although settling an old debt can lower your credit score, it is smart to pay off the debt if you want to apply for a home loan.
Learn everything you didn't know about credit scores in one easy infographic. The truth, the myths, what we lenders look for and how you can improve your score for the better. http://poundstopocket.co.uk
If you ever see yourself borrowing money down the road -- whether it's for a home, car, or business -- you'll want to have a credit score that is squeaky clean. Here's how to build your credit score from the ground up, especially when you have little or none to start!