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Paying off a CO

New Member

Paying off a CO

What impact will paying off a 2 year old CO, with a derogatory account mark on my credit report have on my score?

Message 1 of 13
12 REPLIES
Established Contributor

Re: Paying off a CO

What type of account was it? Installment? CC?

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Message 2 of 13
Frequent Contributor

Re: Paying off a CO

Paying off a CO wouldn't affect your socre - its already been charged off - and thus should have a $0 balance and will not be calcuated into utilization.

 

however - not paying a CO means that its been sold or given to collections and thus they can pop up as well as lawsuits which then can affect your ability to get credit down the line if they are unpaid (mortgage companies do not like seeing open collections or unpaid CO on your reports and will not grant you a mortage with one usually).



Current: Eq- 624 Ex - 631 (lender pulled) TU - 661 (lender pulled)
Goal 700+ across all three
Message 3 of 13
New Member

Re: Paying off a CO

Overdraft bank account.  I can pay if off but can I ask them to remove the account from my report?

Message 4 of 13
Valued Contributor

Re: Paying off a CO

scarrollprint,

 

I disagree with balance not factoring into utilization. Based on my own personal experiences, my 2 CO's were causing my utilization to appear to be 106%.

 

Just my .02.

Scores: about 700 across the board
Total CL: $275k
Message 5 of 13
Frequent Contributor

Re: Paying off a CO

CO not showing a balance are not supposed to be calcuated into the UTIL.

 

If it showed a balance then it would.

 

 



Current: Eq- 624 Ex - 631 (lender pulled) TU - 661 (lender pulled)
Goal 700+ across all three
Message 6 of 13
Frequent Contributor

Re: Paying off a CO


Brock1970 wrote:

Overdraft bank account.  I can pay if off but can I ask them to remove the account from my report?


Yes, you can do what is called a Pay For Delete (PFD).

 

How old is this debt, when did you stop paying it (or probobably more likely when did you overdraft and never bring your account positive)?

 

IF this is an old debt - beyond 7 years then it will come off your reports after 7years +180 days after the first delinquency that caused default (charge off in your case). So if its 7 years and 5 months, you may just want to consider paying it and asking for them to remove, but if they don't, I wouldn's sweat it.

 

Also find out with the Statue of Limitations is for your state. Some is 7 years, some are less, some are more. This is helpful because even if its still on your report, but beyond SOL, you have the leverage not them because they can't sue you anymore. But also the flip side if you live in a state where its 10 years, then even though its off your reports, they can still sue thus you have minimal leverage in asking to settle for a lesser amount.

 

If its almost 7 years old and beyond SOL you could offer to pay 25% in return that they consider the matter closed and remove all info from your reports.

 

You could also do that if its recent and/or within SOL however some CA have been known to have a twitchy gun finger and pull the lawsuit trigger when you offer anything less than 100% so I would make sure you have 100% saved up before contacting them if you know your still within the SOL of this debt.

 



Current: Eq- 624 Ex - 631 (lender pulled) TU - 661 (lender pulled)
Goal 700+ across all three
Message 7 of 13
New Member

Re: Paying off a CO

The bank overdraft CO is 2 years old.  $700 balance.  If I pay how can I assure both the CO and Derogatory mark are removed - if at all possible?

Message 8 of 13
Moderator Emeritus

Re: Paying off a CO

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/What-Steps-Do-I-Take-Do-I-DV-PFD/td-p/337142

 

Above you will find some information on the PFD process which is being discussed here.  Basically you make an agreement with them that if you you pay $XX they will delete the TL from your CR and it would be as it never happened.

 

Now some creditors will say they can't post false information and this is absolutely true, but there is nothing that says they have to post any information at all and that is what you are going for.

 

 

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
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Current scores after adding $81K in CLs and 2 new cars since July 2013
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Message 9 of 13
Community Leader
Legendary Contributor

Re: Paying off a CO

Charging off a debt is an internal bookeeping measure, and does not require the creditor to therafter report a $0 balance due to them

A charge-off does not remove a penny of consumer obligation for the debt, or the ability of the creditor, their assigned debt collector, or any heir to the debt from continuing to collect and report the full amount of the debt as due to them.

 

The impact of having a still-unpaid delinquent debt in your credit report extends far beyond any scoring implications.  It is a clear statement to others that you have not paid obligated debt.  That is always a negative in any creditor review or determination, regardless of score, and could well serve as the sole basis for denial of any further credit.

Message 10 of 13