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Charge off’s

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Anonymous
Not applicable

Charge off’s

Let’s get some common knowledge out there for everyone, including my self. Is it better to pay off a charge off or let it ride out?

For example, I have a WF secured card from Jan/2013 that I let go to better pastures in July/2014. Balance is 146 after the deposit covered most of the debt, It was my first card and well I was irresponsible.

From my understanding, a charge off messes with the algorithms and shows up as a max out card with a late pay every month? I think it sounds ludicrous but I would like some real input.

Lastly, if I pay the arm and leg they are asking for 😂, what are the chances that WF will remove the CO with a goodwill letter or am I going to be Sol until the 7yr mark from 2014?
Message 1 of 3
2 REPLIES 2
gdale6
Moderator Emeritus

Re: Charge off’s


@Anonymouswrote:
Let’s get some common knowledge out there for everyone, including my self. Is it better to pay off a charge off or let it ride out?

For example, I have a WF secured card from Jan/2013 that I let go to better pastures in July/2014. Balance is 146 after the deposit covered most of the debt, It was my first card and well I was irresponsible.

From my understanding, a charge off messes with the algorithms and shows up as a max out card with a late pay every month? I think it sounds ludicrous but I would like some real input.

Lastly, if I pay the arm and leg they are asking for 😂, what are the chances that WF will remove the CO with a goodwill letter or am I going to be Sol until the 7yr mark from 2014?

If a CO us updating monthly then yes its keeping your Fico scores depressed as it looks like it just happened in Ficos eyes and yes its being included in utilization calcs, a CA would not be included in such util calcs. OCs dont like to give out PFDs or remove the CO unless its near the end of the reporting period but it doesnt mean you dont try. Once its paid off and shows 0 balance then it can begin to age in Ficos eyes and over time your score will rise. Welcome to the board Smiley Happy

Message 2 of 3
RobertEG
Legendary Contributor

Re: Charge off’s

There is no factual answer to the question.

It depends upon the individual consumer and their situation and viewpoint.

 

Viewed from the obligation point of view, it is your debt, so it should be paid.

 

Viewed only from the credit scoring point of view, it has pros and cons.

If the creditor has ceased updates for a significant period, the update to paid will be viewed as a statement of extension of the period of delinquency up to that date, but will thereafter terminate further extension of period of delinquency.

If a revolving account, paying will affect % util by reducing total debt balance and removing the account from future % util scoring.

 

I may also, if the creditor still owns the debt and has not yet assigned to a debt collector, prevent adding a collection to your scoring.

If applying for new credit, it may be a manual review factor that will be mitigated if paid.

Finally, if still within SOL, it may prevent a judgment.

 

Lots of factors.  No single answer.....

Message 3 of 3
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