If a creditor has to chase you in order to collect on owed accounts, the creditor will not look favorably upon your credit tendencies. Therefore, paying off these debts is a good way to eliminate such worries. You might want to consider making paying off these accounts as a priority, in addition to judgments and tax liens. Part of the reason it is so important to clear these accounts is that they are recorded as public record. This means the courts have deemed your judgment or tax lien as one you legally owe and weigh very heavily against your credit score. In addition, that these are public records means that any lender could search your shortcomings through government databases and online to see the severity of these judgments.

Charged off, or written off, accounts are those that your creditor has removed from the lender’s listed accounts as an asset after a specified period. Usually, after 180 days, the account will be charged off, and the creditor knows the outstanding balance that you have left to pay as a loss. It is a good idea to pay off these accounts as well, because this action does not mean that the debt has disappeared. It merely states that the lender does not expect you to pay, and therefore will no longer claim your owing account as an asset. Often, after a lender writes you off, a creditor will sell your debt to a third party, known as a collections agency. Such organizations benefit by keeping any money they collect from the debt they purchase. Therefore, their collection tactics can be more exhausting or intimidating than it would be for you to settle the payment before it reached such a stage.

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