Unsure of consequences if paying a chargeoff

[Nicoantique]

My credit is bouncing back. Balances on 5 cards are all zeros except for one at 9 percent.

I have removed a ton of baddies and i'm approaching the 700 mark.

However, I still have a First Premier c/o from 2011 for $343. This shows up in Myfico as a past due balance.

I have the money to pay it off...should I?

Thanks everyone for all your help...I'm almost there!!!

[gdale6]

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@Nicoantique wrote:

My credit is bouncing back. Balances on 5 cards are all zeros except for one at 9 percent.

I have removed a ton of baddies and i'm approaching the 700 mark.

However, I still have a First Premier c/o from 2011 for $343. This shows up in Myfico as a past due balance.

I have the money to pay it off...should I?

Thanks everyone for all your help...I'm almost there!!!

---

Score wise a paid CO is no better than a CO and if it hasnt updated in awhile it will drop your score when its reported as a paid CO. As far as a manual review it looks better to have a paid CO over one  that is still open and unpaid, if its your last baddie I say pay it and hope you can get a GW at some point in time.

[SunriseEarth]

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@Nicoantique wrote:

My credit is bouncing back. Balances on 5 cards are all zeros except for one at 9 percent.

I have removed a ton of baddies and i'm approaching the 700 mark.

However, I still have a First Premier c/o from 2011 for $343. This shows up in Myfico as a past due balance.

I have the money to pay it off...should I?

Thanks everyone for all your help...I'm almost there!!!

---

Are they still actively reporting?   If they're updating every month, you'd benefit from paying it off.  Also, if the balance is weighing down your UTIL, it would be benefit you, too.  Settling in full on an actively reporting CO boosted my score. 

[pr0blumz]

Send them a PFD.

[KellyP25721]

Here's an article I found that may help: http://www.examiner.com/article/how-to-raise-your-credit-score-100-points-45-days

[RobertEG]

+1

You dont actually "pay a charge-off", you pay the debt that just so-happens to have been charged-off.

Their reporting of the CO was of their determiation that you were unlikely to pay the debt, and remains after payment unless you can get their agreement to delete that reporting.

Paying the debt will remove any future issue of having that unpaid debt, which can in and of itself be basis for denail of future credit.

Other than $ out of pocket, it is always of potential beneffit to pay the debt.

The secondary issue is that many creditors will also attempt to recoup a bit more on a debt that they have determined wont be paid.

They can sell the bad debt at a large discount to a debt collector, and the debt collector than assumes the high risk of attempting to collect on a debt that has been reportied as unlikely to be paid.  The purchasing debt collector can then report their collection.

Thus, a CO could easily result in the addition of a further major derog in the form of a reported collection.