How Can I Deal With Unpaid Credit Debt?
August 29th, 2008 By Peter G. Miller
Question: Five years ago, in a foolish moment, I refused to pay a credit card bill. I recently settled the matter by paying off the $800 debt. How will this event impact my ability to get a mortgage?
Answer: The debt and pay-off will likely show up on credit reports, so a lender will ask for an explanation. You can then write that there was a debt, there was bad judgment, you realize you were wrong, you have paid off the debt, and you now have a better understanding of credit. In other words, “Dear Lender: I goofed and it won’t happen again.” Because the matter happened several years ago, it should not be an issue to lenders if otherwise your credit during the past two or three years is good.
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