General Credit Topics

[dfrost733]

Hello, I have been working on rebuilding my credit for a couple of years and it is not moving up any more. The only real bad thing on there is a CO from a couple of years ago. We were trying to sell our house really fast and sold it to a company. Long story short, they ended up negotiating with our mortgage company to take the pre-payment penalty off and it was recorded as a CO. The took off $2994 from the balance and it is showing as "settled for lesser amount" or something like that. I called the mortgage company and they said we could pay it off and it would show paid in full. Do you think it would be worth it to do that? Would our score go up that much?  It is the only CO or bad thing on our report besides a couple of lates. We would love to refinance right now but our scores just haven't improved enough.

we are at 633, 628, 619.

Thanks for any advice

[dfrost733]

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[liz9100]

I would pay the collection off try and see if they will delete the item. If not then pay it and try removing it though the credit reporting agency's some time I have found it to work. Once it paid it looks better to the people you request money from. I would wait to refinance if you haven't already done so. I was told a needed a score of 680 to buy or refinace that why. I'm getting credit from anyone who will give it to me.

One company told me to just pay down everything a lot. I should be in the 600 in 3 months. I will find out if that works in a few months.

[modernsurrender]

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dfrost733 wrote:

Long story short, they ended up negotiating with our mortgage company to take the pre-payment penalty off and it was recorded as a CO. The took off $2994 from the balance and it is showing as "settled for lesser amount" or something like that. I called the mortgage company and they said we could pay it off and it would show paid in full.

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I don't know anything about buying/selling houses, but the situation confused me.  Do you actually owe the money?  They negotiated to take off a penalty, and the account shows settled for lesser amount (who paid the lesser amount?) but it's still listed as a CO?

Hopefully someone with more expertise will chime in for you, but if it is something you owe I'd look into doing a PFD with whoever's reporting it as a CO, to get it deleted from your reports because that's the only way it will increase your scores, Paid or Unpaid, a CO is still just as harmful.

[dfrost733]

Well, what happened was we signed a contract to sell our house to a company. (We had to get out quick) We thought we were selling it for what we owed....but we did not know anything about a "pre-payment penalty" on the mortgage. So when the payoff statement came in we owed almost $3000 more than the contract sale price. The company told us "don't worry about it, we do this all the time, we will negotiate with the company and get them to remove the penalty" So we let them handle it. Very stupid, I know. If I could go back I would do so many things differently, but I can't. So now I am stuck with this Charge OFf on my credit report and I think it is the main thing hurting my scores. We only had a couple of other 30 day late payments. So I called them yesterday to see if we paid what was charged off if they would remove it. They told us they would  report it as paid in full. I requested something in writing and I am waiting to get that. I am just praying that it will be enough to boost our scores 20 or so points. I wish I could know before I do it!

[modernsurrender]

If they won't delete it, chances are there won't be a boost.  Paid or unpaid, it's looked at the same way by Fico for scoring.