Charged Off Accounts

Anonymous · ‎05-04-2015

In 2011 I had an Amazon credit card through Synchrony Bank. I charged off on the card, and did not settle it in full unitl 2014. I assumed the account was in collections, but it was not. It was charged off, but still with Synchrony. The account shows as settled legally for a lesser amount. Does this have the same impact on my score as a collection account? I am assuming GW letters would have a low success probability as I did not pay in full, but I am not sure of the exact impact this is having on my score.

Anonymous · ‎05-04-2015

Yes, a CO is a major derog and has scoring impact similar to a collection - in some cases worse, because the balance can skew your UTI% and it can be separately reported as a collection as well as a charge off.

gdale6 · ‎05-04-2015

@Anonymous wrote:
In 2011 I had an Amazon credit card through Synchrony Bank. I charged off on the card, and did not settle it in full unitl 2014. I assumed the account was in collections, but it was not. It was charged off, but still with Synchrony. The account shows as settled legally for a lesser amount. Does this have the same impact on my score as a collection account? I am assuming GW letters would have a low success probability as I did not pay in full, but I am not sure of the exact impact this is having on my score.

While OCs are less apt to grant goodwill it doesnt mean you dont set up a schedule of letter writing, its sometimes can take years.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/GW-letter-Q-amp-A-Examples-and-GW-Success-Stories/td-p/1573680

RobertEG · ‎05-04-2015

When you settle for less than the full amount of the debt, the debt is discharged, so the owner must update their reporting to $0.

However, they have the option of additionally reporting the special comment that the debt was settled for less than the full amount.

Some posters here in the forum have observed that the speical comment affects their score, while others opine that it does not.

Regardless, the presence of that speical comment of paid/settled for less than the full amount informs anyone doing a manual review of yoru credit report that you have a prior history of not paying the entire obliigated debt. That means that the prior credtior took a loss in having done business with you.

That may have an impact of decision making of future creditors since repetition of that pattern on your part would result in a loss if they lend to you.

It is never a favorable comment.