Re: will paying off a charge off improve score?
10-04-2012 11:15 PM
The impact, in my opinion, is far more than your FICO score. Not paying it, if they do a manual review, may be a show-stopper for any prospective creditor, regardless of your three digit score.
A CO is, in its initial reporting, a posting to all that not only have you been delinquent in your debt, but that your delinquency has reached the stage that, in the creditor's opinion, you are not going to pay. The accounting term is "uncollectible."
Paying can show them incorrect, and demonstrate that paying your obligated debt is important to you.
Not paying simply reinforces the negative observation made by that creditor.
Being under a payment plan does offset that perception.....
Thats an interesting tone-of-thought you expressed. Allow me to ask you this, than what is the reasn for a three digit score in the first place? Paying this type of debt shows a lack of knowledge of the score. Not paying shows knowledge of the three digit score. Look man, I dont make the rules, I just try too live in them. I have lots of other obligations/debt that tells the real story. The scrore is used as qualification first than interest rate next. The score was part of "Regan Econocis" back in the 80's to stop bias in lending. If you ask me, this type of scoring amounts to nothing than Pegan Esoteric Tools. Numerology to be exact.