Charge off problem

Anonymous — Wed, 21 Mar 2012 22:48:08 GMT

Greetings:

1st time posting. Here is my situation. All three of my credit reports reflect a 6 years old "Charged off as bad debt" item from a bank account I once had that was closed by the bank after I over-drew my limit and due to a personal finance crisis did not pay the debt. Related is another same-worded item from the same bank on my three credit reports. My problem is that the first item (the bank account itself) shows a "Balance" of $107. The second item (overdraft credit for that bank account) shows $0 as the balance. My credit scores range from 639 to 660 right now primarily because of the Charged-off $107 balance showing in relation to the total credit limit on 3 credit cards I opened a year ago (total cards' limit=$1,120).

I have kept my new credit cards in good standing, no negative credit reporting for almost 6 years. By the way, these accounts were not turned over to any outside agency(s)- the bank still has the accounts apparently. Should I despute the $107 as being an invalid/innaccurate balance with the credit bureaus? After paying for one of my credit reports (I wanted to see my credit score, that is why I did not opt for the free ones), I let FICO "simulate" the best solution for my low score and it said my credit usage to availabe credit needs to be lower. I only owe $56 total on my credit cards and can only surmise it is the $107 on the charged off account that is dragging my score down. The simulator says my score would be between 715-725 if the problem was corrected. If I win the dispute, if I use that option, and the credit reports reflect a $0 balance on that account, will my score shoot-up to that 715 score range immediately?

My other thoughts as options- one is to up the credit line $500 on one of my credit cards (secured B of A card- just need to pay them the money to up the limit)- that would offset the $107 significatntly, I think? Or another option would be wait another year and some and let both accounts just fall-off my credit report (not the best option, as I'm thinking of buying a home within 4 months) Or I could contact the bank and try to work a pay-for-delete agreement just for the $107 account. I would like the best option that would be the quickest in raising my credit score in that 700-plus range, as I would like to buy a home as stated earlier, and receive a decent interest rate. Any insight/suggestions/help would be greatly appreciated. Thank you for your time.

Welcome to the forums!

I edited your post to create paragraphs, none of your content was edited, tho.

--fused, myfico moderator

Re: Charge off problem

fused — Wed, 21 Mar 2012 22:43:49 GMT

I really think your post belongs in the rebuilding forum, so I'm going to move it over there.

Re: Charge off problem

IOBA — Thu, 22 Mar 2012 15:58:38 GMT

jdforeman - If the charge off is 6 yrs old, it is having little (but still some) effect on your credit score.

IMO, the nice thing to do, the correct thign to do, is to pay off the money you owe the bank. At best, it should report as a zero balance, which looks nicer to any potential creditors.

topic Charge off problem in Rebuilding Your Credit

Charge off problem

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Re: Charge off problem