Paying off a charge-off continuing to report as 150 days late

[lemster001]

Ok, I tried to scour the boards for an adequate answer to my situation. I am less than 20 points from my refi. I have very good utility (8% overall and no individual cards over 50%), but my scores have taken a dive lately. I am guessing this is in part to a charge off reporting as late 150 days more than 67 times. It is reporting as late as last reporting period.

I know that paying off or settling the charge off will not result in a score jump. But the question is this; would my score rise in virtue of the late reports ceasing?

I know the damage is done. But would I see at least a small general increase in my scores during the next reporting period now that the account is paid and closed as opposed to reporting late since the rest of my report is generally clean?

Oh, and this creditor is adamant against making any changes to the reporting even after payment. I tried to no avail. Any info would help!

LS

[Revelate]

Oh that's nasty.  

When did it last update as 150+ days late?  Was it some point in the past or is it still being updated as recent?

If it's constantly being updated (and some lenders do this) I'd just pay it and draw the line in the sand.  It likely won't be an immediate improvement but as the now resolved derogatory ages your score will go up with time from this point forward.

If it's old, I've never experienced it personally but we've had people who have seen a score drop by paying a charge off as it can reset the last activity date (God only knows why as it should be scored from the last delinquency date) , but I'm simply not well versed in charge-off payment effects.  Hopefully someone can give you a better answer on that one.

[lemster001]

It doesn't look very optimistic. It last updated as late this past month.

Also, does anyone know the difference, if any, in scoring a reset DLA on a CO as opposed to a Collection? I know DLA on a collection would make it look recent, but would the same hold true for a CO since the date of the CO is established already?

You are probably right that I should just cut my losses and move on, but I'm needing to know what to expect to plan ahead. I don't have a collection open for this, just a CO with a balance showing. Perhaps paying can reduce my utility? As it is, the outstanding balance is taking 45% util.  

Thanks for your attempt to answer this inquiry. If you have further insight, it is most welcome. Hopefully someone with personal experience with a similar situation would chime in as well.

[Revelate]

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@lemster001 wrote:

It doesn't look very optimistic. It last updated as late this past month.

Also, does anyone know the difference, if any, in scoring a reset DLA on a CO as opposed to a Collection? I know DLA on a collection would make it look recent, but would the same hold true for a CO since the date of the CO is established already?

You are probably right that I should just cut my losses and move on, but I'm needing to know what to expect to plan ahead. I don't have a collection open for this, just a CO with a balance showing. Perhaps paying can reduce my utility? As it is, the outstanding balance is taking 45% util.  

Thanks for your attempt to answer this inquiry. If you have further insight, it is most welcome. Hopefully someone with personal experience with a similar situation would chime in as well.

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Paying it now would reduce utilization, stop the lates from showing up as new, and prevent it from going to collections.  I'd absolutely pay it honestly.

All scoring is supposed to be done DOFD, re-aging of collections sadly happens.  Someone else would have to answer whether the CO would "reset" on DOLA, but fact is 150+ days late is a major derogatory, to the point whether it reages the CO or not is sort of immaterial.  

[lemster001]

I just got it paid off! Well, settled. I know it doesn't look as great, but I didn't have enough for the full balance.

I think it can only get better from this point on, don't you think? Funny, it looks like I may reach my temporary goal of qualifying for the refi by virtue of my utility. But it remains to be seen whether taking care of the CO will knock me out of contention for a while or not.

Question, you said "All scoring is supposed to be done DOFD, re-aging of collections sadly happens" does this mean re-aging is illegal? Would it be within a consumer's right then to sue a creditor or CA for this and losses incurred from paying high interest rates over the period that the score was re-aged illegally? I'm not too well versed with the law.

[lemster001]

As an update, I did get the account paid (settled) off. It is now reporting as settled for less than full, the balance is $0 and it looks like they are only reporting lates from 2009 which is awesome!!!! And so far no dip in score! Not one point! But it was only updated recently so I am still going to run a couple more updates within the next week to see it stays. Maybe the utility offset the dip of DLA? 

[Revelate]

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@lemster001 wrote:

As an update, I did get the account paid (settled) off. It is now reporting as settled for less than full, the balance is $0 and it looks like they are only reporting lates from 2009 which is awesome!!!! And so far no dip in score! Not one point! But it was only updated recently so I am still going to run a couple more updates within the next week to see it stays. Maybe the utility offset the dip of DLA? 

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Maybe, so far cross your fingers and count it as a win regardless .