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Should I settle or wait with Capital One??

Regular Contributor

Should I settle or wait with Capital One??

Ive got a past due/ charge off account showing for Cap One, from back in Sept. 2006, balance is currently $1000, orig credit limit $300. They agreed to take $500 to mark as paid-settled w/ zero balance. Would this improve my scores? Other option is to do nothing...
Staring Score:EQ 649 TU 647 EX 644
Current Score: EQ 786 TU 699 EX 746
Goal Score: 800
Wallet: SF Fire CU $5000 CL Chase Freedom 4000 CL, Chase MP $5000, WellsFargo $6000 CL, Amex Gold NPSL, Cap1 CashRewards $2500 CL, Amex BCP $12000 Discover More $1200 CSP 18000
Message 1 of 10
9 REPLIES
Established Member

Re: Should I settle or wait with Capital One??

I would try a PFD or wait for it to fall off since you are almost at the 7 yr mark.
4/26/12 - TU 600, EQ 595, EX 553
7/2/12 - TU 612, EQ 594, EX 584 Lender pull
7/7/12 - TU 664, EQ 627, EX???
GOAL - 720 minimum across the board

Mantra - Having bad credit is a sure way to become financially invisible.
Message 2 of 10
Regular Contributor

Re: Should I settle or wait with Capital One??

It will probably still report as a paid charge-off and show that you settled for less than the full balance so I don't know that you would gain any points. Maybe ask them to remove the charge-off status in exchange for payment.
Message 3 of 10
Moderator Emeritus

Re: Should I settle or wait with Capital One??


Madman94044 wrote:
Ive got a past due/ charge off account showing for Cap One, from back in Sept. 2006, balance is currently $1000, orig credit limit $300. They agreed to take $500 to mark as paid-settled w/ zero balance. Would this improve my scores? Other option is to do nothing...

Hello and welcome to the forums.

 

In most cases paying and/or settling a charge off will not help a score but there is one exception. If the CO is a credit card and both the balance and credit limit are being reported then the account is still being factored into your utilization. In your case the utilization on this account is 300% (1,000/300). That one factor is a score killer.

 

I would either try to pay this off so that your utilization is lowered and thus your score improve or accept their offer which will also remove this account from utilization. Be aware though that if you pay this off to zero the CO itself will still report.

 

I would not opt to do nothing. As long as this account continues to report the CL and balance you are being hurt.

 

 Edited to add: A PFD offer is also an option. Have you tried this approach with them?

 


 

Message 4 of 10
Regular Contributor

Re: Should I settle or wait with Capital One??

Thanks for the info. I'm going to try to discuss with them again this week... Here's the approach I'll use: See if I can get pay for delete in writing. If so, take it. If not, see if I can get status changed from CO to settled for $500, if so, take it. If not, pay the $500, and dispute status. Either way I'll take care of it this week. Balance will show zero and it will fall off credit report next year. I'll report back on impact on score.
Staring Score:EQ 649 TU 647 EX 644
Current Score: EQ 786 TU 699 EX 746
Goal Score: 800
Wallet: SF Fire CU $5000 CL Chase Freedom 4000 CL, Chase MP $5000, WellsFargo $6000 CL, Amex Gold NPSL, Cap1 CashRewards $2500 CL, Amex BCP $12000 Discover More $1200 CSP 18000
Message 5 of 10
Regular Contributor

Re: Should I settle or wait with Capital One??


Hello and welcome to the forums.

 

In most cases paying and/or settling a charge off will not help a score but there is one exception. If the CO is a credit card and both the balance and credit limit are being reported then the account is still being factored into your utilization. In your case the utilization on this account is 300% (1,000/300). That one factor is a score killer.

 

I would either try to pay this off so that your utilization is lowered and thus your score improve or accept their offer which will also remove this account from utilization. Be aware though that if you pay this off to zero the CO itself will still report.

 

I would not opt to do nothing. As long as this account continues to report the CL and balance you are being hurt.

 

 Edited to add: A PFD offer is also an option. Have you tried this approach with them?

 


 


I spoke with them again, the offer that they are sending in writing is as follows: I pay the $500 to settle the account, they will not attempt further collections. I asked if the balance would show zero, the man in the phone is unsure. Should I take this offer?
Staring Score:EQ 649 TU 647 EX 644
Current Score: EQ 786 TU 699 EX 746
Goal Score: 800
Wallet: SF Fire CU $5000 CL Chase Freedom 4000 CL, Chase MP $5000, WellsFargo $6000 CL, Amex Gold NPSL, Cap1 CashRewards $2500 CL, Amex BCP $12000 Discover More $1200 CSP 18000
Message 6 of 10
Regular Contributor

Re: Should I settle or wait with Capital One??

This situation is happening with me right now. I settled an old CO with CapOne for 70%....the rep told me the balance left would still show unless I paid in full. I don't know if this is true yet. They should report by July 15. I will be updating one of my previous posts about this issue then. For me, it was/is affecting my utilization badly so I had to do it anyway.
Current FICOs (Sept 2015) EQ: 666 TU: 663
Message 7 of 10
Highlighted
Regular Contributor

Re: Should I settle or wait with Capital One??

They for sure report the unpaid amount of the settlement. I know this because they just did it to me.
Message 8 of 10
Regular Contributor

Re: Should I settle or wait with Capital One??

Good to know, though I've read it can be disputed. As soon as mine shows up, I'm disputing it for violation on the FCRA. RobertEG helped me with the details in another post....it is ridiculous that they do this.
Current FICOs (Sept 2015) EQ: 666 TU: 663
Message 9 of 10
Regular Contributor

Re: Should I settle or wait with Capital One??

@Mondavi I just sent you a PM but I just realized you already answered my question here. Better start drafting my dispute letters....
Current FICOs (Sept 2015) EQ: 666 TU: 663
Message 10 of 10