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Question about a charge off

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monicar2009
New Contributor

Question about a charge off

I have a charge off thats been on my credit report for a few years. I recently check my fico score and it says I have a ulitization of 140%. The charge off is for $1700.  I tried searching and some people say to pay it off and some say no. So what do I do from here? it is effecting my ulitization so shouldnt i pay it off?

 

 

Thanks for your time

Message 1 of 4
3 REPLIES 3
llecs
Moderator Emeritus

Re: Question about a charge off

How old is this OC account in relation to your AAoA? Older? Younger? If younger, offer the OC a PFD. If older, then send a modified PFD not asking them to remove the account but rather to remove the lates, CO reference, etc. If after several attempts continues to result in "No". Then I personally would pay in full without a PFD.
Message 2 of 4
Anonymous
Not applicable

Re: Question about a charge off

I respectfully, yet strongly, disagree on this matter.  Regardless of the AAoA impact, if you can get a full PFD, take it and be glad.  Regardless of how a CO and CA affect your AAoA and overall FICO, a lower FICO without this type of derog is actually better than a higher FICO with this type of derog.

 

While this forum is focused on FICO, we must remember that FICO alone is only one part of credit.  FICO is the "first tier" qualifier.  However, many lenders will not touch BK, CO, CA or unpaid versions of these.  And those who do, often will not give to you the same CL's and credit treatment as they do to somebody with an actually lower FICO, but stronger CR content.

 

If you are FICO fixated, then removing a CA or CO can hurt you.  But if you want an overall "best" credit, then get the derogs off.

 

In the current economic and credit climate, derogs are hurting you more than you know.  In the past, a good FICO overcame old derogs.  Now, a great FICO is overcome by old derogs.

 

Just my opinion, but it is based upon personal experience having achieved 800 plus FICO and still have prime lenders say NO until I got the derogs removed.

 

In this particular case, getting a PFD would remove the derog and lower the utilization....a two-fer bonus.  It would also improve the CR content.  And as far as FICO is concerned, I believe the reduction from 140% utilization will offset any AAoA hit.

Message Edited by txjohn on 05-03-2009 09:23 AM
Message 3 of 4
monicar2009
New Contributor

Re: Question about a charge off

So I should send a letter or call them?
Message 4 of 4
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