Understanding FICO® Scoring

[owlnutS]

I have an old Capital One account that show as Bad Debt/Colection for status,but also show as revolving and as part of my amount of credit being used. There has been no activity on this since Feb/07.

Should it count against me in so many ways??

Any suggestions, it's already been 5 yrs so I was planning on waiting till it fell off my credit.

[AndySoCal]

Is Capital One reporting a balance?  If so it is affecting your credit utilization ratio mostly the balnce also exceeds your credit limit which is not helping your score either.

[owlnutS]

Yes it still shows a balance.

[owlnutS]

Shows balance,charge off account,closed by credit grantor,last activity Feb.2007.

Show on DTI which puts me at 116% of aval. credit.

[mtrsprt]

It should be a closed/charged off account, and should NOT be factored into your open available credit utilization, unless it is an open account that can still be used.

It may state "revolving" as the type of account it WAS....  but its not anymore.

[golo]

Interesting,hopefully the gurus here can shed some light on the issue.I have the same situation,as the account is not close and it's been like that since nov 06 and is killing my score.

[IOBA]

owlnutS - the way I understand it, if the balance has not been paid off, Cap one can still report it if they own the debt.   They have every right to close out your account if you didn't pay the balance.

Even though the account is closed, the money is owed and would still be considered in the overall utilization.  Whatever your previous credit limit was on the card would not be factored in with the account closed.

If Cap one SOLD the debt (and they don't usually sell the debt, but will have a company try to collect on their behalf), then they would need to report a zero balance.  Then it doesn't affect your utliization BUT the collection agency might start reporting it.

If you can, call Cap one or just send them a payment.  If you pay if off, they will have to update to a lower balance or a zero balance (if paid off).

[sjt]

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IOBA wrote:

owlnutS - the way I understand it, if the balance has not been paid off, Cap one can still report it if they own the debt.   They have every right to close out your account if you didn't pay the balance.

Even though the account is closed, the money is owed and would still be considered in the overall utilization.  Whatever your previous credit limit was on the card would not be factored in with the account closed.

If Cap one SOLD the debt (and they don't usually sell the debt, but will have a company try to collect on their behalf), then they would need to report a zero balance.  Then it doesn't affect your utliization BUT the collection agency might start reporting it.

If you can, call Cap one or just send them a payment.  If you pay if off, they will have to update to a lower balance or a zero balance (if paid off).

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Thats the way I understand it as well.

The benefit of paying off a collection or charge off account, for scoring purposes,  is that it lowers your utilization ratio.