Should I Pay Charge offs?

[Anonymous]

I have a couple charge offs with the city of San Diego with very low balances. what i was wondering is should I do a PFD on these accounts or does paying CO's do no good? How will this hurt or help my credit?

Message Edited by imfocused on 06-22-2009 01:46 PM

[Anonymous]

29 views and no answers whats going on is this a stumper?

[Anonymous]

Not a stumper, just a very common question.

Paying a CO or a CA generally does not help your score.  It's the fact that you have a collection account or a charge off that is the impact.  Sometimes the balance on a CO can be included in your avail credit, and it demolishes your util.  So in those (rare) cases, paying it off can help.  (deleted a sentence--got you mixed up with the other ticket guy in Cali).

So it doesn't help your score, but it would help you on a manual review--which a mortgage app is.  And if you didn't pay it off, you probably would be required to before closing.  So take that into consideration too.

That's why people advocate for PFD's--a deletion usually involves a score jump, unless you have lots of baddies or it affects AAoA.

Message Edited by jesslyn on 06-22-2009 03:47 PM

[Anonymous]

oh ok thanks alot jess I knew you would come thru yeah im trying to help the other SD guy out also since i have had some dealings with the city of san diego. They are th OC and yeah i am in under righting right now so I want to get these taken care of and they are under $200 i just wasntsure if paying them would do me any good.

Message Edited by imfocused on 06-22-2009 03:54 PM

[RobertEG]

Not paying a CO can negatively impact your credit score if the OC later places the account for collection, which they can choose to do at any time.  Then yoou will have both a CO and CA on your CR.

[Anonymous]

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Hi - I have a CO on DH report for Swiss Colony for a small amount and when I run the "what if" simulator on creditkeeper, it only shows a few points gained if I can get it deleted, but it shows a huge loss (like 44 or more) of points if we pay it off and leave it on - am trying for PFD from them, but so far their responses have not had a thing to do with our questions - finally sent the letter to the pres asking for GW for pfd - don't know if it will work, but point being, I was amazed at how much damage paying it off would do according to this simulator.  Much less damaging to leave it as is, so not much incentive to pay it off if they don't agree.....     

[Anonymous]

One of the unfortunate ironies of credit repair.  Talk about an anti-incentive.

[Anonymous]

yeah that was a devistator. makes me think whether i want to risk paying and gain a few points or it backfire and I lose a alot. If I dont get thru underwriting tomorrow then I wil pay it all off just so when i start looking again I will have no problems. what do you guys no about setting up a payment plan to pay off a debt can it be a positive or a negative any tips on how I should handle setting it up.