Reply
Member
Posts: 11
Registered: ‎08-11-2010
0

Very Simple Question, Please help me if you can

Ok,

To sum it up very short, I have $1000 which I am going to use to pay off my bad accounts. My question is which one should I pay off to have the best immediate impact on my credit? I have a closed Bank of America credit card with a $3,000 balance; and TWO First Premier Bank Cards which are charged off as bad debt, with a $500 balance each. How should I allocate the $1000?

Thank You for your help, it is very appreciated 

Moderator Emeritus
Posts: 32,869
Registered: ‎08-04-2007
0

Re: Very Simple Question, Please help me if you can

Is BofA current at this point?

Mega Contributor
Posts: 19,485
Registered: ‎03-19-2007
0

Re: Very Simple Question, Please help me if you can

[ Edited ]

To sum it up very short, I have $1000 which I am going to use to pay off my bad accounts. My question is which one should I pay off to have the best immediate impact on my credit? I have a closed Bank of America credit card with a $3,000 balance; and TWO First Premier Bank Cards which are charged off as bad debt, with a $500 balance each. How should I allocate the $1000?

_____________________________________________________

Simple question, but unfortunately, not a simple answer.

You apparently have three closed accounts showing balances.

My initial opinion is that the real issue now is not so much improving current credit score, but more one of avoiding more future harm.

I dont know the exact status of each account, but if the BOA account is closed with a balance, it might progress to a charge-off, or a collection, or even legal action.

The two 1st Prem accounts have already progressed to charge-off, which might mean referral to a debt collector, and thus posting of a CA to your CR may be looming.  Or maybe legal action.

So, my advice, before you do anything else, is to identify two things.  The current reporting of delinquenices under each account, and the statute of limitations (SOL) on the debt of each.

From your credit report, what are the exact dates of each monthly reported delinquency on each account before they were closed or charged-offf?

These dates are critical in determining how long each will remain in your CR, and also to establish your date of first default (DOFD) on the OC account, and also the date of commencement of the running of your SOL.

Next, you need to know your state civil code regarding both the date of commencement, and period of running, of your SOL on each debt.

Which to pay first depends, in my opinion, primarily on the threat that each now imposes.  Effects of % util would be secondary to me at this point, and would not be my deciding criteria.

Can you provide more specific information on each account?

Member
Posts: 11
Registered: ‎08-11-2010
0

Re: Very Simple Question, Please help me if you can

Sure, both of the First Premier cards were charged off in 11/09. The BofA payments are current, but was closed in 7/10.

Mega Contributor
Posts: 19,485
Registered: ‎03-19-2007
0

Re: Very Simple Question, Please help me if you can

In my opinion,I would pay the COs off if still within SOL, based on their continued risk.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.