3 Year CO CC from CAP1 still increasing balance killing my utility. Advice?

[bmartinta]

I have two CO CC on my report that are over 3 years old and past the SOL in VA. I have been trying to build my credit since Feb 2011, but I have only seen a jump of 30 points. I have done the following.

Payed all debts on time since 2/2011

Paid off a car loan

Opened secured card $1000 and PIF or make monthly on time payments since 10/2012

Opened new Auto loan $15,000 and make on time payments since 1/2013. 16% (OUCH)

Pay $600/month on time for student loans since 7/2012

It seems that the CO from CAP1 is what is really killing my score. I show 111% credit util because they continue to up my balance and have been doing so since it was CO. The amount is now more than double then when I first went delinquent which was $750 and is now $1700. They have been adding $18-20 per month for the past 6 months or so. Obviously CAP1 still owns the debt, but they refuse to deal with me. They forward me to a CA that they have contracted to take care of the debt. The CA said they "CANT" remove the TL if I offer a PFD, which I assume to be true since they are not the OC. Mind you this CA is NOT reporting anything at all. So even if I paid them the only thing that would happen would be the CAP1 TL will report a $0 balance and show as "paid collection" - right? 

My other CC CO is from Chase and is being reported as $0. However, they did sell the debt to Portfolio Recovery and they report a balance of $1,055, but that has not changed in years. Mind you this is NOT reporting as a "Collection" it is as an open account that is "past due".

I received an offer from Portfolio the other day as if they wanted to wake a sleeping giant. They offered me a settlement of $500 or so and agreed to updated the TL as PIF. What should I do with this? It seems this is not hurting my as much as the CAP1.

With that said what the heck should I do? I have 2.5 years of solid, consistent payment history on all accounts. I am financially stable, but I also want to take the right course of action and see some legitimate gains to my score.

Thoughts?

[llecs]

DW dealt with a CapOne CO. They'll continue to add interest and add lates monthly. I tried mailing PFDs to CapOne up to 12 times monthly for 100% of the reported balance for over a year with no success. Finally CapOne sold the debt to someone and they updated to $0 and that resulted in a FICO spike due to improvements in util (that card was at 300% alone ($750 balance of a $250 CL)). If I had that to do over again, I'd just pay it in full and start GWing. I probably had a hundred or more tacked on in the year I tried.

For Portfolio, I would send a DV if you haven't done so already. If they verify and you agree, then I'd mail a PFD. Remember, a paid or settled CA is equally as bad as one with a large balance, per FICO.

[bmartinta]

Thanks for the reply llecs,

Thanks for the feedback. That is sort of unsettling. Basically the only option I have is to pay it off just to get the balance to report $0 and that will open up my Util? Does the scoring model account at all for the date of last delinquency even though the account balance is actively changing? Moreover, could I attribute this one account as the reason for my struggle to increase my score? In other words, it seems that my other efforts to rebuild and improve my score has been in vain simply because CAP1 continues to report the balance and increasing it monthly. If so then I see no reason to offer Portfolio a PFD or even take a "paid in full" settlement because as you said it is equally as bad. However, is the balance reported by Portfolio calculated into my utilization even though it is not actively reported on?

[llecs]

Unpaid CO'd CCs really hurt, especially monthly updating ones. FICO does account for the DOFD but also looks at the fields of DOLA (which can change sometimes with an update or payment) and reported or status dates. IIRC, each FICO formula reads each date a tad differently but an updating CapOne CO will not help your FICO any for sure.  It can also hamper your overall util and ding your FICO that way (aside from having a mexe dout CC reporting). My DW overcame that slightly by adding more credit, but at best her util couldn't go below 25% with her then-reporting CapOne. You can certainly pay to stop or PFD, or wait until they sell it. We are also in VA and ironically CapOne sold it in the very month her SOL expired. But sounds like SOL has passed for you so maybe they haven't found a buyer for that debt. Dunno.

For CAs, I never ever never paid them without a PFD or guaranteed deletion somehow. The only time I ever paid a CA without a PFD agreement was when they initiated a lawsuit on me and then it was a no-brainer to PIF w/out a PFD to avoid even more damage, despite offering multiple PFDs for 100% w/ multiple denials. Portfolio Recovery wouldn't be factored into util though.

[bmartinta]

Thank you. Lots of good info there. So basically I have two options with regard to CAP1.

1. Wait for them to sell and come to terms that my score is being weighed down heavily because of the reporting balance.

2. Pay the contracted CA and bring the balance to $0 effectively decreasing my utility, but still retaining the damange of the CO. 

My options for the Chase CO CC that was sold to Portfolio Recovery

1. Ignore - Since the balance on this account is not factored into my util, the damage of this account becomes less with age. Is this the correct assumtion?

2. PFD - If no PFD is accepted then refer back to option 1? 

I have another scenerio I wanted to run by you,

What if I took a significant sum of money out of my savings and added it onto my secured CC? Since a secured CC is essentially a line of credit on your own money I could effectively use my savings to increase my CL which would in turn decrease my overall credit util. Is this something you would recomend in order to acheive a FICO spike? 

Reason I ask this is because I want to move out of my house, but I am weary of landlords running my credit. My financial state is fine and on its face no landlord should be worried as my income is sufficient enough to cover a monthly rent a few times over.I would hope a landlord would consider that and be willing to look past a poor score given the circumstances outlined. If I can some how circumvent this and create a spike in my FICO score by dramatically increasing my CL and drastically decreasing my util it might be something seriously worth considering. Of course I can pull the money out at any time as I have no plans to use the the funds.

Again, thank you for your help.

[RobertEG]

In my opinion, a determination not to pay a debt based only on the fact that it wont improve FICO score does not consider the bigger picture that non-payment simply reinforces the prior reporting by the creditor that the consumer is unlikely to pay their debt (i.e.,in the accounting charge-off lingo,  it is considerted to have become "uncollectible").  While the debt remains unpaid, they dont have their money, and are usually entitled to continued accrual of interest for use of theri money under the account agreement.

A prior statement by a creditor that a consumer's debt has become uncollectible, in combination with the fact that it continues to remain so after their reporting of that determination, is hardly a scenario that entices future creditors to extend credit.  Thus, unpaid charge-offs can kill future credit regardless of FICO score.

Ultimate credit report exclusion wont relieve the consumer of the obligation to disclose the unpaid debt if asked.

[takeshi74]

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bmartinta wrote: Pay the contracted CA and bring the balance to $0 effectively decreasing my utility, but still retaining the damange of the CO. 

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Hard ot say for certain simply reading a post but the comment above seems to severely underestimate the impact of utilization.  If you're at 111% getting it down will make signiificant improvements.  Don't just dismiss utilization because of the CO.

[llecs]

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@bmartinta wrote:

Thank you. Lots of good info there. So basically I have two options with regard to CAP1.

2. Pay the contracted CA and bring the balance to $0 effectively decreasing my utility, but still retaining the damange of the CO. 

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Ignore the CA for CapOne. Pay CapOne....ETA...if you choose not to wait.