How to approach this?

[Sxott]

I have an account at an old credit union. Says I owe 495 out of a 500 credit limit (type being revolving account) and charged off at the same time. The debt just passed SOL last month and I don't want to do anything to reset it.

My main prob with it is that this "charged off revolving account" is wrecking my debt to credit utilization and putting it at 60 something percent.

It should just be sitting in collections and getting ready to fall off my report in a year.

How should I approach this?

Line of CreditKitsap Federal Cu

Status as ofDate opened [?]Date of last activity [?]Date closed [?]Loan type [?]Credit limit [?]Largest past balance [?]Account Type [?]Account holder [?]Industry

Feb, 2013

Nov, 1995

Jan, 2007

Apr, 2007

Line of Credit

$500

$500

Revolving Account

Individual Account

Credit Unions and Finance Companies

Descriptions [?]

• Unpaid balance charged off

Contact Information [?]1025 Burwell St
Bremerton, WA 98310
(206) 479-3300

Balance [?] Current Status [?]

$495	Charged off as bad debt

Seven year payment history [?]30 days late60 days late90+ days late

0 times

0 times

0 times

Worst Delinquency [?]

None Reported

The Worst Delinquency reports the worst missed payment status that has been documented on this account. Your FICO® score evaluates how recently that missed payment occurred and in general, the more recent, the more impact it has on your score. However, the fact that it occurred is still predictive of future payment risk and could be considered by your FICO® score.

[DaBears]

Send a PFD letter.

[Sxott]

I have thought about that but its a credit union Im dealing with here. Not a CA.I wouldn't think they would put something like that in writing for me like a sleazy CA would because they are really not suppose to do that right? I would gladly pay the 495 to make it just disappear.

Just being corrected will put my untilization below 10% and that will give me a pretty good score increase.

Trying to take the money I have now and knock out my most recent collections Thats my other prob. Not sure witch ones to pay because I dont want any new dates. I have enough cash right now to knock out my entire collections side of things but fear that it would hurt my score.

Im trying to get my score into a decent spot to buy a house. Then I wont be worried about the score and knock out all debt and start building after. I just need about 40 more points to get a fair deal from a lender for a home.

[guiness56]

The reason the CO is not "sitting in collections" is because it is not a collections.  The OC still owns the account and never assigned it to a 3rd party CA.  If they would of done that your CR would have been doubly dinged.  One for the CO with a balance, the other from a CA on your report.

What do you mean by the CO being corrected will bring your utilization down?  It is reporting correctly. 

[Sxott]

But it says charged off.

[RobertEG]

A charge-off is not, in any way, a reduction in the debt owed.  The consumer still owes and the creditor can still report the entire debt balance.

A charge-off is simly an internal bookeeping measure taken by the creditor to reduce their accounting receivalbe assets by shiftting the debt they consider uncollectible over to a bad debt column.  They get the tax benefit.  The consumer gets nothing except a ding in their credit report.

The charge-off is just as bad as a collection.

Eventual credit report exclusion does not relieve the consumer of the obligation, if asked, to disclose the unpaid delinquent debt to a potential creditor.

I would not reply on CR exclusion alone to bar its discovery in a mortagag app process.

[Sxott]

Im still not sure what to do here?

If I pay them my debt vs credit goes under 10% Good.

If I pay them, The date gets reset. Bad

Which would be worse?

Maybe I should go into the bank and show them my credit report and let them kmow that SOL is up and if they restore that 500 limit, I will pay them. Would that work or would it screw me on the dates too?

It drops off my report in 10 months but if there is some action I can take to get a credit bump, Id rather do that.

[Crossdivided]

1) +1 @DaBears, if they agree to PFD, all other points are moot.

2) i think youre confusing SOL with CRTP.

    - SOL= when they can no longer take legal action. if you pay it, then there WOULDNT BE anything to 'reset'

    - CRTP= the whole 7.5 yrs from DoFD thang...absolutely nothing resets that date...a PFD would solve that. otherwise pay then GW til you run out of stamps.

3) i think youre missing the key point when it comes to a CA. it may not be at a collections agency YET, but if you put it off it may very well END UP at one. then youd have to deal with the CU AND the CA over the same 500 bucks.

IMHO, id pay it if i had the scratch on hand. if it hits a CA youll have TWO CR entries, not to mention that 500 bucks may end up listing as 5675567678 dollars after the CA "fees", etc. ya'll know how they do...

[Sxott]

I guess I will attempt a PDF to the credit union then. Or walk in and verbally offer them a PDF. They are right down the road. If they are cool. I'll even ask for my credit back.

Your saying by paying them off, it will not hurt my score and change the date its due to fall off?

You really think a collection agency would buy a debt that is passed SOL? My DOFD was 6 years and one month ago. SOL is 6 years where I live.

[dddewdrop]

    There are 2 issues here, what is the best thing for your credit, and what is is right thing to do. You seem to understand the two issues and their implications pretty well. Imo the right thing to do is to pay back the money that you owe. It is not 100% clear that you will be penalized by reaging for doing this. I would only go and talk to the CU manager if you have decided to commit to paying this debt. Going in there and explaining to them how you are deciding between just ignoring the debt because of SOL or paying it off and trying to have that discussion with them would be the wrong thing to do. Either commit to paying, and then trying your best to get some sort of PFD agreement in place, or commit to just leaving it.  Any sort of middle ground could get you stuck where you don't want to be, If it were me it would depend on how much money I had to pay it. 500 dollars would be a really big hit for me right now so in my current financial situation I would just leave it. However, if I had the money then I would pay it and I would do so by making an appointment with the manager of the local CU branch. With check in hand I would explain to him how you are real sorry you didn't pay til now and you are real concerned about it being redated on your credit report and is there anyway they they could possibly delete it from your report and be prepared to accept the consequences if they say no. 

     As someone else mentioned, if you ignore it, there is still a possiblity that this debt could be sold to a CA and cause you more problems in the future. Good luck.