topic Re: No idea hat to do ... in Rebuilding Your Credit

No idea hat to do ...

Anonymous — Wed, 23 Mar 2016 23:39:27 GMT

I have an old CO from a credit card. 6 1/2 years. The account is closed and has been closed for years.

The creditor reports the account every months with an ever rising balance due. So it makes my utilization look awful which is keeping my scores down.

So even though I have less than 8% utilization on all my other debt this one past due account is effecting my scores. Not sure how to handle this and want to get my scores up before applying for a mortgage.

Mortgage lender told me to NOT pay it because it'll look like a new collection account & lower my score. So paying it is not an option.

Not sure what my next step is.

Re: No idea hat to do ...

Anonymous — Wed, 23 Mar 2016 23:45:03 GMT

If you are 6 months out I believe one of the bureaus will start doing EE at 6 months and another at 3. That might be your only option. More than likely they are updating it monthly in hopes that will get you to pay before you exclusion date comes up.

Re: No idea hat to do ...

Anonymous — Thu, 24 Mar 2016 00:29:29 GMT

What is the amount due? Are you past statute of limitations? Even if it falls off your report, you may have to disclose it to the lender.

TU sometimes does EEs at 6 months. Other EQ/EX at 3 months. It won't appear as a new collection. I never had any negative ramification from paying it. Since they're updating monthly anyway, it won't make any difference.

Re: No idea hat to do ...

Anonymous — Thu, 24 Mar 2016 00:48:21 GMT

Mortgage loan person at bank told me to absolutely not pay it. She said my scores will drop if I did.

I just thought if there was a way to exclude the balance from my report it would drop my utilization down alot & give me a boost in my scores. The account is closed so I just dont understand why its included in utilization anyway. I realize the debt is still there and It is included on my mortgage app but....

Re: No idea what to do ...

Anonymous — Thu, 24 Mar 2016 00:49:04 GMT

btw its Cap One.

Re: No idea hat to do ...

Anonymous — Thu, 24 Mar 2016 00:47:53 GMT

If it displays as an owed debt on your report, it will be included. Even if it's closed, it's part of your total debt burden. The only way to exclude it is to have it removed from your report. Otherwise your options are to pay it or leave it alone.

Re: No idea hat to do ...

settleordelete — Thu, 24 Mar 2016 17:26:16 GMT

The mortgage person has probably seen your situation hundreds of times and has had alot of success with getting people financed for home loans.

Don't let it frustrate you, forget about the account and continue being financially responsible with everything else.

Re: No idea hat to do ...

Anonymous — Thu, 24 Mar 2016 19:01:35 GMT

I agree with settleordelete. If you were instructed not to pay and it can't be goodwilled off your only option would be to see if you can get some early exclusion. The only other thing you can do is wait for it to fall off on its own.

Re: No idea hat to do ...

Anonymous — Thu, 24 Mar 2016 19:19:09 GMT

@Anonymous wrote:
Mortgage loan person at bank told me to absolutely not pay it. She said my scores will drop if I did.

I just thought if there was a way to exclude the balance from my report it would drop my utilization down alot & give me a boost in my scores. The account is closed so I just dont understand why its included in utilization anyway. I realize the debt is still there and It is included on my mortgage app but....

Mortgage person was flat out wrong. If its killing your UTI and is being updated monthly paying it will most certainly improve your scores, and will NOT hurt them. The only time paying an old item hurts your scores is if it has not been updated for more than 2 years.

Re: No idea hat to do ...

Anonymous — Thu, 24 Mar 2016 19:58:19 GMT

It brings my util into the 30% range. If it wasnt there it would be single digits util %. I dont have a lot of credit. I have credit cards but only a total of $1650 of credit limits. This CO is only 300 but now the balance is over $600; hence the util problem.

The way it was explained to me is that if I pay it now I will lose points in the short term while my mortgage app is pending. However my scores would recover but not during underwriting.

Re: No idea hat to do ...

kennerchick — Thu, 24 Mar 2016 20:16:51 GMT

Call CRA's for Early Exclusion. Cap one was on my husband's reports and just before it hit 3 yrs, they removed themselves from the reports (at least I think they did it, we didn't dispute it).

If it isn't EE, the CRA will remove it at the end of the 7 yr mark.

Good Luck

Re: No idea hat to do ...

Anonymous — Thu, 24 Mar 2016 21:32:06 GMT

@Anonymous wrote:
It brings my util into the 30% range. If it wasnt there it would be single digits util %. I dont have a lot of credit. I have credit cards but only a total of $1650 of credit limits. This CO is only 300 but now the balance is over $600; hence the util problem.

The way it was explained to me is that if I pay it now I will lose points in the short term while my mortgage app is pending. However my scores would recover but not during underwriting.

As I said the points will be lost ONLY if the item has not been recently updated within the last couple of years. If they have been updating every month, then updating it to paid will not hurt you, as its already doing maximum damage.