topic Re: Capital One CC Charge Off--Should I Pay? in Rebuilding Your Credit

Capital One CC Charge Off--Should I Pay?

jjosh122 — Sun, 11 May 2014 13:34:57 GMT

So I have a Capital One Credit Card account reporting the following:

opened 9/2007

last activity 08/2008

charged off

Current balance $3507

reporting a $19 balance increase every month!

This is being reported monthly directly by Capital One, but is being handled by Holloway & Moxley out of AL.

they will not remove if paid; should I pay or wait? my scores are 604, 607, 613, and I'm trying to get them up for mortgage qual. This is the worst thing on my report.

Thanks guys!

Re: Capital One CC Charge Off--Should I Pay?

Shogun — Sun, 11 May 2014 13:57:08 GMT

It's almost 6 years old. I'd offer a settlement on it, see what they respond with.

Re: Capital One CC Charge Off--Should I Pay?

jjosh122 — Sun, 11 May 2014 17:16:07 GMT

Shogun,

Thanks for the response. Is settling going to have the best impact on my score? My other options would be: 1) pay off full amount. 2) Do nothing and wait until it drops off. I want to do what's best for my score.

Thanks again for any advice.

Re: Capital One CC Charge Off--Should I Pay?

gdale6 — Sun, 11 May 2014 17:57:51 GMT

If Cap-1 is reporting it every month it is holding down your score as it appears new to FICO. At this point I would make an offer to settle as suggested by Shogun and include a request for it to stop reporting every month after its updated to settled status. This will remain on file for 7.5 yrs from the DOFD so if you are not in a rush to get that home you may just want to wait it out as well. Good luck on what you choose to do,

Re: Capital One CC Charge Off--Should I Pay?

Shogun — Sun, 11 May 2014 18:50:40 GMT

@jjosh122 wrote:
Shogun,

Thanks for the response. Is settling going to have the best impact on my score? My other options would be: 1) pay off full amount. 2) Do nothing and wait until it drops off. I want to do what's best for my score.

Thanks again for any advice.

FICO scores do not differentiate between settled and paid in full. It's a derog the same either way. So paying in full vs settling doesn't matter to score. Only thing it could matter to would be an UW doing a manual review. In that case, you can usually explain those away.

If it's still owed by the OC, and is figuring into your util, then paying/settling could make a difference. If they haven't updated in awhile and suddenly do, it could cause a drop. So you see there are many variables to it.

I almost always suggest the paying of the bill if it is properly yours. However there's no problem with settling it and saving some money. Another option is to let it age off and then offer a small settlement. The choice is totally yours.

Re: Capital One CC Charge Off--Should I Pay?

coterotie — Mon, 12 May 2014 01:51:23 GMT

First if you're within 6 years, in Alabama there is some debate as to the SOL. Debtor's and their lawyers argue for 3 years, Creditors and their lawyers argue for 6. Unfortunately the courts have ruled in both directions. Holloway will sue, but they are sloppy and may or may not show up for the trial. (they didn't on mine and the judge threw the case out)

So I would wait until the 6 years is up before I did anything. As to credit score, my cap1 that Holloway collected on has fallen off EQ and it raised my score by 50 points. So my EQ is 710 lender pull and EX and TU are 647 with it still reporting each month as you described. IF you can stand the pain until the SOL tolls, but you can't stand the pain until it drops then settling is a good thing. With a PFD, otherwise it won't help. Meanwhile, keep your scores clean, pick up some good cards and wait it out. I got a Barclays w/ a 1.9K limit, Marriott Chase w/6K and Sportsman w/6K all with it still reporting. Also financed a car and refied a car (with Cap1) and approved for a boat (with local CU) loan at their A tier, which I may actually use tomorrow.

Re: Capital One CC Charge Off--Should I Pay?

SunriseEarth — Mon, 12 May 2014 22:15:54 GMT

@jjosh122 wrote:
So I have a Capital One Credit Card account reporting the following:

opened 9/2007
last activity 08/2008
charged off
Current balance $3507
reporting a $19 balance increase every month!

This is being reported monthly directly by Capital One, but is being handled by Holloway & Moxley out of AL.

they will not remove if paid; should I pay or wait? my scores are 604, 607, 613, and I'm trying to get them up for mortgage qual. This is the worst thing on my report.

Thanks guys!

What was the original CL on the card?