Only when you agree to restart paying off the debt with a new contract and repayment plan, the creditor could agree to change the status of one of your accounts. Creditors' main goal is to collect the money from debts. Not to make negative reports on past due debtors. Creditors are not interested in ruining debtors' credit rating, and after you pay them, they will simply give you a perfect mark in credit rating. You could always choose to pay the one creditor that is willing to readjust your credit rating to a positive one.

For those advanced negotiators If your account is sent to a collection agency, as a debtor, you will have to face 2 different negative listings within your credit report: one from the collection agency, and the other one from the original creditor. Once the original creditor stops contacting you, and sends the account to a collection agency, it is very complicated to change the negative listing already entered. Although it is very difficult to change the negative listing, it is not impossible. After paying all of the debt, you should require the collection agency take away the negative listing and plead your original creditor to change it to Paid as Agreed.

Although the collection agency may have nothing to do with the original creditors' negative listing, you have to hand them over the obligation of clearing your credit listing after you finish paying off the money owed. When you finish paying the whole debt amount, you both benefit: the collection agency and the original creditor, so you have the right to request the removal of the negative listing from the creditor.

If you have to accept a deficient listing

- Unrated account: Sometimes, when your creditor does not want to remove the negative listing from the account, you could plead to him to list the account as an Unrated Account. This way the next creditor will see neither a positive nor a negative. It is actually neutral and has no effect on your credit rating, unless the account has a late fee associated with it.

- Paid account: you could also propose the creditor to list the account as Paid, but you have got to be very careful not to let the account show as Paid Charge-off or Paid Repossession because either one of them has a highly negative impact.

- Settled account: as a last resort, you should agree with your creditor to list the account as Settled, because of all the listings, it is the least damaging. Other negative listings such as Charge off, Repossession and Late Payments should be avoided at all costs because anyone of them could deeply harm your credit rating. - Paid charge-off or paid collection account: this condition is equivalent as showing the account as Debt Unpaid, so you should settle the listing condition at the time you agree to pay the debt. Sometimes the creditor simply forgets how harmful this condition can be.

People need to understand how this process works in order to repair everything from the account indebted and continue having a normal credit rating.

Check these links to learn more: http://www.personal-bankruptcy-avoidance.com/Bankruptcy/CA-California/Bankruptcy-CA-California.shtml http://www.personal-bankruptcy-avoidance.com/Bankruptcy/TX-Texas/Bankruptcy-TX-Texas.shtml