Paid all my old charge-offs… Can I expect much increase over the next year?

[m5daniel]

I (foolishly) paid 3 charge-offs over the last couple months--  Now I realize I should have tried a PFD or a Goodwill deletion.

However, what is done is done.

My score dipped down slightly (now at a 589).

My last late payment was about a year ago, and I have about 20% utilization.

Will I see much improvement over the next year?  Hoping to get to 640 and apply for a mortgage.

Thanks everyone!

[Shogun]

As they age, you will see improvement.  In the meantime, a few GWs for those paid baddies might pay off.

[NWintellectual]

Did you pay the OC or a CA/JDB?

If the CO was still reporting a balance (i.e. not sold to a CA/JDB) you might see a bump since the reported balances do reflect in overall UTL% (balance against zero CL). I just settled two COs with FP last month and was rewarded by about a 20-30 point increase. Although it's hard to tell that those settlements specifically led to the increase since a couple of old student loans that were being incorrectly reported as in collections, despite being rehabbed in 2009-2010, also fell off around the same time.

On the other hand, if these COs were reporting zero balance and instead you paid a CA/JDB, you might actually see a temporary decrease in your score if the CA had not reported any updates on the account in the last 24 months or so. This is because FICO sees the updated information as a "new" account and punishes you accordingly. If the CA/JDB has been reporting monthly (or frequently), it might actually improve your score since your total balances will be lower.

However, like Shogun said, as time goes on, this will have less and less impact on your score. In addition, bear im mind that it will look immensely better to see the item being reported as paid/settled upon manual review should you apply for new credit since lenders like to see you resolve your obligations, even if a little late.

[RobertEG]

I would definately pursue GW deletion of the charge-offs.

Reporting of a charge-off is their prior determination that you were not going to pay the debt.

By paying the debt, you have demonstrated that you are a consumer who does pay their debt, but for whatever reason, such as temporarty hard times, you were very late.

Continued inclusion in your credit report of that prior determination that you were going to stiff the debt thus does not fairly reflect upon you as a consumer.

Thus, its deletion from your credit report can be argued to more accurately reflect upon you as a consumer.