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Paying a Bad Debt to Open a New Account
I have owed a bank $140 since 2001. Because of the report of this unpaid debt I have not been able to open a new account. If I pay this off now, how long will I have to wait before I can open a new account?
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 You now have a track record of not paying your debt. First and foremost, the debt should be paid so that the blemish goes away as quickly as possible. When you make the payment, ask the bank, or insist that the bank send in a "paid" notice right away. It may take up to a month to run through the reporting cycle to show on your report. You could, however, get the contact information of a person at the bank you paid on the receipt. When you apply for a new account at another bank, if they have a problem with your report, show them the receipt for payment in full and ask them to call the contact if necessary. This should meet any immediate needs you have.
The second part of the question is, "will it matter?" To some banks you will have a history of not paying and they may not want that. To others, it is a small amount and was eventually paid, so they may be fine with you. The point is, what is policy at one bank may not be at another. You may need to shop your request to more than one bank when this is paid.
Published on BankingQuestions.com 11/13/06
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