BofA Charge off pay or not to pay?

[Anonymous]

I am trying to build credit now. I have a limited credit history as I am a foreigner and not used much credit, but I was not very responsible with two credit cards I had in the past. I had wells fargo $500 which I was late on (this was in 2004 and doe not show up in Equifax report anymore) and BofA ($1000) which as of now is reported as CO with balance $480. I do not have any debt and no credit cards. My Equifax score is 628 as of now. Yesterday I got approved for Cap One Platinum Mastercard which, I hope will improve my score.

1. Should I pay off the $480 to BofA, i.e., will it improve my score? I called BofA and they told me that if I pay it they will stop reporting the CO.  I asked very specifically whether they will just report it as paid CO or they will actually stop reporting it as CO. I was told they will stop reporting it as CO. Advice? 

2. Also, what else can I do to improve my score? I am thinking I will be buying a condo or a house with a rather large down payment two years from now and a car probably also 2 years from now and I would like ot get into reasonable credut score by then. Anyone has an advice?

3. Does Cap One report Credit limit to the agencies these days?

Thanks!

[drkaje]

If BoA agrees, in writing, to delete the account upon receipt of payment take the deal. Them putting "Paid Charge-off" will only help if you're trying to get a mortgage soon and you'll still have any late payments on the report because BoA will not remove them.

Unless they're willing to delete the entire tradeline you're only paying because it's the right thing to do. If any customer service agent says "You can call back later or trying writing to have late payments removed" it's a (insert profanity of choice) lie.

You'll probably only find three examples on this site where someone got a goodwill adjustment from Bank of America (FIA). Even Junk Debt Buyers have better records of showing goodwill, LOL!

Call the same person back and ask  "Can you mail me something in writing saying the tradeline (with account number) will be deleted from all 4 credit reporting agencies?" if they say yes, which I sincerely doubt, send them the money after having the signed letter in hand. Even then, it may require a fight for removal. Also, do not pay them over the phone or give any checking/CC info!!

[Anonymous]

Hi drkaje,

Yeah, I called BofA just now and asked specifically what you suggested. I was told it is against federal law to delete anything from the report and if I do pay they will still report is as charge off with the only difference being it will be paid charge off. Would that help my score at all?

Thanks again.

[drkaje]

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@Anonymous wrote:

Hi drkaje,

Yeah, I called BofA just now and asked specifically what you suggested. I was told it is against federal law to delete anything from the report and if I do pay they will still report is as charge off with the only difference being it will be paid charge off. Would that help my score at all?

Thanks again.

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The person who told you that is misinformed or simply trained to say no. Federal law requires whatever information added to a credit report to be accurate but they are under no obligation whatsoever to report a thing.

I'm no expert but have read (here) that many places will not approve a mortgage with unpaid charge-offs.

I'd try calling back and asking for a supervisor. They'll give the same initial answer but it'd be interesting to hear what the response is once being confronted with what the law requires. Getting another lie won't cost anything but time. Someone at BoA can make this happen but the minute you've sent in money all leverage is gone and you'll have to live with the mistake for 7 years. BoA will not show goodwill after the fact so you really have to make the best deal possible while possible.

From what I understand having the charge off updated to paid status would affect your score far less than having the late payments removed.