6 year old Capital One account.

Anonymous · ‎03-07-2015

Ok so I need some help. According to the credit score simulator, if I pay this balance, my score will increase significantly as I have 3 revolving credit lines that are all reporting well (I'm guessing it will reduce the utilization percentage). I contacted Capital One since it is past the SOL, and they are willing to settle for $0.50 on the dollar but will mark it as settled and still report the remaining balance that was "unpaid". It is due to fall off in March of 2016. They are still reporting it every month, so it's really hurting my credit. Should I settle the account, keep trying for a better settlement ofer, or just wait it out? Also, it states that the account is still open. Does that seem correct? Thanks in advance!

Here is how it looks on my credit report:

Company - Capital One

Type - Credit Card

Account Holder- Individual Account

Date Opened Dec, 2005

Credit Limit - $300

Status - Open

Status Date -Jan, 2015 Open

Last Activity Apr, 2009

Balance $1,276

Status Charge-off, Charged off as bad debt; Unpaid balance reported as a loss by credit grantor

Anonymous · ‎03-07-2015

Not an expert, but I had a charge off with Cap1. My balance was like $1600, and they settled for about $600 off. I made payments for 6 months and they updated the new balance each month. Once it was paid, they reported a $0 balance and noted it paid and closed. Maybe try to call back and negotiate something better, as it seems to me they should be reporting a $0 balance if they agree to a settlement. Not sure though. Good luck.

RobertEG · ‎03-07-2015

If they agree to a settlement, regardless of its amount, then they are required to report a $0 balance. That is not optional.

What they are most likely referring to is that the amount of debt that you did not actually pay is considered cancelled debt, and must be reported to the IRS via a form 1099c. The IRS considers debt cancelled by a creditor to then become "income" to the consumer, for which the consumer may have to ay income taxes.

Anonymous · ‎04-24-2015

Update...

So I took the 50% settlement offer and paid the money 3 weeks ago. My credit report quickly updated with only the amount I paid (still showing at a 638.00 balance, down from around $1350.00). They stated that after a 21 day waiting period, it would be updated to a zero balance. I called them earlier today and they stated that my credit report would be updated on Monday. Here's to hoping that they're being truthfull and the balance updates early next week. Should boost my scores a great deal!

RobertEG · ‎04-24-2015

Once the debt is paid, the account will be removed from util scoring, both as to its credit limit and its balance.

I doubt that any improvement in overall % util will be significant in scoring.

Anonymous · ‎04-25-2015

Currently, the debt has been used in the overall util % and scoring and has been putting me around 500% above my credit limits which was killing my score. According to the score simulator, if I pay this debt, my utilization percentage should drop to less than 10% even with this account no longer being factored in. Is the score calulator incorrect in this? I will be so bummed as I was really hoping for a big increase. Thanks!

Anonymous · ‎05-06-2015

Update!

Just like the score simulator predicted, my TU score went up 27 points, EQ went up 17, and Exp went up 21 after the account went to a 0 balance and was no longer hurting my utilization. Thanks to the MyFico boards for all of the advice!

Anonymous · ‎05-07-2015

Cap One is a bitch to deal with. I had an original $1200.00 bill that quickly escalated to a $2200.00 WO and judgment. They were not updating monthly and my first past due payment was 10/08. Finally at 6.5 year's, I contacted all 3 CR agencies and asked for early removal. All 3 removed the account. Now I've got 3 or 4 month's to go till the judgment falls off. Can't wait.