WWYD? Drop Util or pay Collections first?

[Anonymous]

I'm trying to clean up my credit reports & I'm down to the last few collections/charge-offs. I am also at around 50% utilization. I can either pay off all my balances and have ideal Util, or attempt to do my last PFD's and work on Util later. I know it's up to my personal credit goals, but what would you do? Not applying for anything soon, but don't want to get hit with interest either.

[Anonymous]

If I had collections and chargeoffs that each were agreeing to PFD'S I would do that first to get the derogs off my reports and then I would work on UTIL.

Having baddie free credit files is first and foremost !

FICO has no memory of UTIL.

[RonM21]

I'm with Donny. See if you can arrange PFD's first. If you can, I would deal with them. If not then working on the utilization can come into play. Also, keep in mind, if you pay the baddies off after they will not PFD, there is stilp the route of then sending GW letters.

[grillandwinemaster]

Yes, as Donny and RM have stated, go for the pfd's. Keep I mind that your scores have the potential to rise as your report gets cleaner and cleaner. So you MAY be able to accomplish score improvement AND report cleaning at the same time!

Best credit wishes to you!

[RobertEG]

...adding to what has been said, the debt collector can make regular updates of the collection, thus making the non-payment of the delinquent debt constantly update in the eyes of FICO, preventing score recovery, and if the debt is still within SOL, they could at any time initiate civil action.

Is the debt still within SOL?

[Anonymous]

As @grill was sharing...as the baddies come off, coupled with CLI the debt/ratio issue can happen doubly fast as you pay down and ask for CLI due to the better scores generated by the deletions 1st and the cascading downward debt load

Good luck

[Anonymous]

---

@Anonymous wrote:

I'm trying to clean up my credit reports & I'm down to the last few collections/charge-offs. I am also at around 50% utilization. I can either pay off all my balances and have ideal Util, or attempt to do my last PFD's and work on Util later. I know it's up to my personal credit goals, but what would you do? Not applying for anything soon, but don't want to get hit with interest either.

---

I vote pay off the collections. Paying interest stinks, but at least you remain current while paying off other obligations. You'll feel a lot better about paying off your credit card balances when you don't have other debts looming over your shoulder.

[Anonymous]

---

@RobertEG wrote:

...adding to what has been said, the debt collector can make regular updates of the collection, thus making the non-payment of the delinquent debt constantly update in the eyes of FICO, preventing score recovery, and if the debt is still within SOL, they could at any time initiate civil action.

Is the debt still within SOL?

---

No. SOL where I live is 3 years. They are all at least 4 years old.

[Anonymous]

Thanks for the responses everyone. I'll just bite the interest bullet and get those last collections off. I think I will feel better once that is done!

[JayTee1]

Take care of your negatives first so those will start aging if they can't be removed.  Or if you're lucky, you can get them removed through a PFD agreement.

You can always deal with utilization whenever you want, since it has no memory.  You can't count on those collections being removed, and it's better to see them aging, fully paid off, and in the past.

You will regret it if you put off dealing with those (I speak from experience).