Correct me if I'm wrong, but I thought I read a thread stating that collections and chargeoffs are calculated in utilization. If this is true, how can paying in full help utilization and hurt credit score if updated?
I don't think collections are but, I know when I use the FICO simulator it included my CO. My CO has a past due of about 300 bucks and it mapped that over to the FICO simulator for revolving credit..
In FICO scoring, collections reported by collection agencies or other third-party collectors NEVER factor in util calculations. Charge-offs, however, can and usually do factor in util calculations...this unfortuantely can really tank your scores.
Unlike collections, paying-off or paying down a CO might raise your FICO scores. Some have reported improvement in scores while others haven't. And yes, any improvement in scores would be directly related to lowering util.
