topic Utilization for charged off cc... in Understanding FICO® Scoring

Utilization for charged off cc...

Anonymous — Sat, 08 Jan 2011 21:00:20 GMT

Does anyone know if the balance on a charged of cc is factored in when determing my utilization for my revolving credit?

Re: Utilization for charged off cc...

MarineVietVet — Sat, 08 Jan 2011 21:07:54 GMT

@Anonymous wrote:
Does anyone know if the balance on a charged of cc is factored in when determing my utilization for my revolving credit?

It depends.

- If a closed CC account with a balance continues to report the original credit limit, then both the balance and the CL of the closed account will be used in the utilization calculations.

- If a closed CC account is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.

- If a closed CC account is reporting a non-zero CL but has a zero balance, the card will not be included in the calculations.

- If a closed account reports a CL that is equal to the balance (balance chasing), then this will be included in the calculations. This is the worst-case scenario with regard to utilization.

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Utilization for charged off cc...

Anonymous — Sat, 08 Jan 2011 21:14:58 GMT

On my credit report, it says that the cl for the cc was $500 and the balance is now over $1300..So, it is being used in determing my utilizaion. What will have a bigger affect on my credit score, paying off the cc and getting a $0 balance so my score will go up or my score getting lowered because of it being updated for paying the cc?

Re: Utilization for charged off cc...

MarineVietVet — Sat, 08 Jan 2011 21:26:06 GMT

@Anonymous wrote:
On my credit report, it says that the cl for the cc was $500 and the balance is now over $1300..So, it is being used in determing my utilizaion. What will have a bigger affect on my credit score, paying off the cc and getting a $0 balance so my score will go up or my score getting lowered because of it being updated for paying the cc?

I'm not sure what you mean by your score going down for paying this.

If you have the money I would pay this off as soon as possible. Your utilization is through the roof and that should be your first priority. Once that is done you can try to get the lates payments that led to the CO and the CO itself removed early through GW letters.

Re: Utilization for charged off cc...

RobertEG — Sat, 08 Jan 2011 23:22:40 GMT

If the OC account is showing a CO with a balance owed, that means the OC still owns the debt, so you still pay the Oc. COs are closed accounts, So if you pay it off, you will also lose its CL in your util calculation once the balance reaches zero.

Things may soon change. Most accounts are referred for collection after a CO, so you may soon see a collection appear on your CR, and then you have much bigger problems. It is not all about your % util.

Re: Utilization for charged off cc...

AndySoCal — Mon, 10 Jan 2011 02:07:11 GMT

Question when was the account charged off ?

Re: Utilization for charged off cc...

OptimalCS — Wed, 12 Jan 2011 11:15:32 GMT

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marinevietvet wrote:

- if a closed CC is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.

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My experience have been very different in regards to this statement. I currently have a chargeoff amex card with a balance of $2200 with no reported credit limit. This is killing my fico score especially with TransUnion. This is my only revolving balance on my credit report. My other six revolving accounts are $0 balance. TransUnion specified this particular balance ($2200) in my explanation of what's hurting me. Also my utilization is 63% with both EQ & TU, but I only have one closed revolving chargeoff balance reporting. I have come to understand that ALL revolving balance affects utilization and fico scoring even if they dont report a credit limit.