Should I pay charge off??

[Superman85]

I have a charge off account of $374, which states it has a "Date opened" of Sept 2008 and a "date of last activity" of sept. 2008. I need to know if I should pay this off even though the 7 year mark is almost done.

I'm not planning to buy a house until October of next year so maybe it would be best to wait.

[RobertEG]

If it is an OC account, the account itself will not become excluded or deleted, only the individual adverse items reported under the account.

After the charge-off is excluded, the account will remain with no showing that the debt was paid.

That is apt to raise questions in a manual review of your CR.

Exclusion of the charge-off will remove it from scoring, and it will no longer be a red flag pointing to unpaid debt.

However, many mortgage app processes will ask for a disclosure of any unpaid, delinquent debt, so they wont need your CR to become aware of it.

It is always best, other than $ out of pocket, to clear the deck of any unpaid, delinquent debt, particularly when you will be applying for larger amounts of credit that may be likely to do either a manual review of your CR or ask for disclosure of information outside of that CR review.

[Superman85]

Ok so if I decide to pay, should I write a letter to the OC which is TXU energy, asking for a PFD?

[RobertEG]

I would pursue a PFD, as if they delete the CO, it will be gone from your file.

If the CO simply becomes excluded after its 7 yr plus 180 day exclusion period, it remains in your credit file, but does not appear in your credit report.

There is a provision, although rarely used by creditors, that permits them to order a full-file credit report that includes normally excluded items.

Review of applications for credit that involve a principal amount of $150K or more is the most common example.

As a practical matter, if you dont plan on needing your credit score before the CO becomes excluded, it is a bit acedemic as to whether it is excluded from your credit report and scoring at an earlier time.  Give it a shot, but if they wont accept a PFD, it may not be of any practical significance if exclusion will occur prior to use of your score.

[Superman85]

Thanks for your help!