Rebuilding Your Credit

[mickie08]

My wife has a midscore of 585.  We are currently in Escrow for a house in temecula, Ca and have a loan approval based int he current situation.  The one thing that I think is really pulling her score down is a charge off that was charged off last July.  It was a fraud account, but I have had no luck getting it removed.  If I could PFD it I would but First Premier will not PFD or allow me to pay the balance and re-activate the account so it shows currently.  If I pay off the balance, will it help my score (even if it shows as a CO still)  Or am i better to just let it hang.  The reasonin is that if I can get a a rapid-resore off this of over 620, alot of things are better for our home loan. 

a -  pay off balance

b -  leave it

c -  PFD

d -  pay it and have the account re-activated.

Which choice would help me the most short term on my credit score.

[jbh]

Paying it off won't boost the score. That said, have you attempted a debt validation? Search that term or "DV" and find the appropriate advice/letters if you have not.

If it's a fraud account, I suggest you do everything in your power to dispute it as it'd be the only way (technically) to get it removed ethically (if it's not yours, it must be removed if they cannot prove it is yours).

[fused]

Paying off the CO might improve her scores. Is it possible to go ahead with the purchase, then pay the CO or have removed and refinance a year later with better scores?

[fused]

By the way, you can't DV an original creditor. DV is sent to CAs.

[mickie08]

It is definitely possible that the we could go ahead at the current price and refi in a year.

[llecs]

Paying it off would very likely improve her scores as the balance would no longer negatively impact utilization (if it is currently). I guess it would depend if there is a current impact and if they util on the other CCs is low.

I remember DW had a CapOne acct get sold and utilization on that CC dropped from 250% to 0% and her scores all increased over 20-30 points.

[fused]

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llecs wrote:

Paying it off would very likely improve her scores as the balance would no longer negatively impact utilization (if it is currently). I guess it would depend if there is a current impact and if they util on the other CCs is low.

I remember DW had a CapOne acct get sold and utilization on that CC dropped from 250% to 0% and her scores all increased over 20-30 points.

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I agree with you for the most part, but there have been instances where this has not happened, though it is rare.

[fused]

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mickie08 wrote:

It is definitely possible that the we could go ahead at the current price and refi in a year.

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Go this route. Don't do anything that could possibly break the deal. Get the house, then repair credit. I thought this was suppose to be the other way around.