If you need help with settling old accounts, visit the Bills.com debt settlement savings center. To get a no-cost credit report from each of the three consumer credit reporting agencies, go to AnnualCreditReport.com
Resolving debt and your credit report
Resolving the charged off account appearing on your credit report will have a positive impact on your credit rating. The past delinquency will not be removed from your credit report, but it should reflect a $0 balance on this debt.
Although the past delinquency and charge off will continue to negatively impact your credit rating, the impact should be much less if you pay the outstanding balance. Resolving this account will remove an outstanding balance from your credit profile, and it will reduce your "debt to available credit ratio," which will also have a positive impact on your credit rating.
Because I do not know the other details of your credit history, I cannot tell you how much resolving this debt will improve your credit score -- the increase in your credit rating may be quite large or very small depending on how many other accounts and other factors currently being reported on your credit file. For more information about credit, credit reports, and credit scoring, I encourage you to visit the Bills.com credit page.
You may have noticed that I use the word "resolve" rather than "pay" thus far in responding to your question. The reason I do not like to speak of "paying off" the account is that it implies paying the full balance of the debt. Many creditors will agree to reduced balance settlements on delinquent accounts.
For example, if you contact the creditor and explain that you would like to settle this account, the creditor may be willing to accept a reduced-rate settlement to fully resolve your outstanding debt. In many cases, I have seen creditors accept as little as 30% to 50% of the balance owed to resolve the outstanding debt. Generally speaking, creditors will require any settlement offer to be paid in a single, lump sum payment, though some creditors may allow you to pay a settlement over the course of a few months.
Get everything in writing
If you are able to negotiate a settlement with the creditor, I strongly encourage you to obtain a written settlement offer from the creditor prior to tendering payment. If you choose to settle this account, your credit reports may list an account status of "settled in full," "settled as agreed," or "settled for less than full balance." These account statuses are not considered as positive as a "paid in full" status, but the difference is generally negligible, especially considering the amount of money you may be able to save by settling the debt.
If you would like to read more about debt, and the options available to consumers who are struggling to pay their bills, I encourage you to visit the Bills.com debt help page.
I wish you the best of luck in resolving this debt, and hope that the information I have provided helps you Find. Learn. Save.