Charge off Affecting Utilization, Do I pay settlement to improve score by 60 points

[Anonymous]

Do you think this is something that I would be able to get with Wells Fargo? i have tried disputing through lexington law to see if that will help, but to no avail through now. If this is the case it will fall off in 2009. 

[Anonymous]

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@Anonymous wrote:

Totally understand. Should I just pay the settlement amount then, or do I need to pay the full amount. WIll it make a different with my score or with future attempts to get a loan, credit or mortgage?

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Mines was from 2012 also. They wanted to settle for less but I opt to pay the full amount. I didn't want it reporting settled for less (as if it mattered since it still reports as CO but paid in full). My loan officer advised me to pay the full amount though. I guess it all depends on how it reports but do you really want to chance it? I would pay it in full if it won't put you in a bind. 

[Anonymous]

It is 3k when the principal was only 600. So maybe I will just pay in in full.

[Anonymous]

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@Anonymous wrote:

It is 3k when the principal was only 600. So maybe I will just pay in in full.

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See if they can waive any late fees associated with the account and get it back down to a lower balance. 

[Anonymous]

Thanks, Ill try that and see what I can do. 

[Anonymous]

It is 3k when the principal was only 600. So maybe I will just pay in in full.

[Anonymous]

I recently paid Discover $6300 for a charge off in the hopes my scores would improve DRAMATICALLY since the utilization was at 116%

..... boy was I wrong. My highest bump was 23+ points; lowest was about 13+points ..... I could have done so many better things then waste away that money. The only thing it gave me was peace at mind (which is beautiful btw) ..... however, in the hopes of improving my credit I wish I would have just settled rather than pay in full. I get better score bumps with opening new accounts than I had with lowering my utilization. .......

[JustinA]

I'm about to have a paid charge off report any time now. It was showing 116% utilization. Not expecting a big bump but I'll post up what I find. It had a 464 balance now PIF

[surferchris]

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@RobertEG wrote:

It makes no difference in scoring whether you pay in full or settle for less, as either requires them to update the debt balance to $0.

The difference would only be relevant in a manual review IF the creditor chooses to report settled for less to the CRA.

If you settle for less, the reporting of that special comment is optional.  It is never a favorable comment in your credit report, as it informs others that you have a history of not paying the entire debt that you obligate.  That means the creditor took a loss in dealing with you. It could affect a lending decision.

If you obtain, as part of your settlement negotiation, their agreement not to report settled for less, then it will appear in your credit reprot ths same as if it had been paid in full.

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Good, well though out response.  Thanks for the info.

[surferchris]

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@Anonymous wrote:

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@RobertEG wrote:

....it is still revolving debt owed, so is just as much a part of your balance as it would be if the account was in good standiing, for example.

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+1

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+1