To pay or not to pay

[Anonymous]

Big question for the forums. I started rebuilding my credit about 4 months ago and have clawed from 500 to right at 600. I have some student loan lates that I am in the midst of getting removed. But my area of concern are a judgment from citi bank (1674) about to pay that off this weekend. And the biggie is a capital one charge off from 08/2009. The balance is around 2500 which I can pay off, however, when I called them to pay it they said they were sending me a 1099 and that there was no reason to pay it. Well the 2500 is destroying my utilization so using the myfico credit simulator if I pay it, my score will improve around 42 points. Should I try to increase my limits to offset the amount and wait out the report expiration or pay it for the score boost. I am trying to get a house next June so getting to 620 is a must, 640would be nice. Any advice everyone?

[Anonymous]

Tell them you do not want your debt to 'be forgiven', you want to make good on your obligation and you are not going to take no for an answer - basically tell them to "shut up and take my money". They can send you a corrected 1099 if one has already been sent.

The problem with the 1099 thing is that often banks will NOT zero the reported balance even though the debt has been forgiven. I believe Cap One and BoA are a couple of ones that are notorious for this.

You would have to get your limits above 25K for it to have a really beneficial effect, and I don't really see that happening with 600 scores....

[Anonymous]

Sounds good, sir. Just mailed them their money. Hopefully it won't take them a million years to update. I know the company handling the judgement is going to take forever to do anything plus there are forms I have to take to 50 different places. Hopefully though I can get to the mid sixes over the next year