topic Re: remove charge-off or keep for AAOA? in Rebuilding Your Credit

remove charge-off or keep for AAOA?

FirstAscent — Sun, 18 Mar 2018 23:31:23 GMT

Hello everyone,

I have 2 credit cards that are closed and showing as Charge-Off, both paid. They are also my 2 longest opened accounts at 10.5 and 11.5 years which helps my AAOA.

I'm pretty sure I could dispute both of these and get them removed because I think they were actually closed longer than 7 years ago. So, what do you think would affect my scores more, having the better AAOA or a lower AAOA but not showing the 2 charge-offs?

Thanks for any tips!

Re: remove charge-off or keep for AAOA?

Brooklyn2018 — Mon, 19 Mar 2018 01:20:38 GMT

Wow! That is a catch 22 Question!

Do you have any positive TL’s going for you now? If so, how old are they?

Re: remove charge-off or keep for AAOA?

Sneakytiki — Mon, 19 Mar 2018 01:23:21 GMT

Try to get rid of the CO accounts.

Re: remove charge-off or keep for AAOA?

cyrusvalentino — Mon, 19 Mar 2018 01:29:37 GMT

Given that payment history accounts for 35% of your score and AAoA only accounts for 15% I would say remove the chargeoffs if they are your only negatives, but when I say negatives I’m not just meaning accounts that were chargeoffs. Do you have any other 30, 60, or 90 day late payments on other accounts? What is the age of your next 3 oldest accounts?

Re: remove charge-off or keep for AAOA?

Anonymous — Mon, 19 Mar 2018 01:33:20 GMT

What revolving accounts do you have open presently? And how long?
Regardless, it's a charge-off and charge-offs never look good. Does it still report monthly by the way?

Re: remove charge-off or keep for AAOA?

Sneakytiki — Mon, 19 Mar 2018 01:41:11 GMT

If those charge offs are still hurting your score, they probably are and its more than likely a large amount of points, you are still in a negative scorecard. Once you remove them as your accounts age and your good payment history builds, your score will build up much faster and won't hit the wall it will hit with those charge offs still reporting. You may even get a boost when you remove them.

Re: remove charge-off or keep for AAOA?

FirstAscent — Mon, 19 Mar 2018 02:05:29 GMT

as for open accounts, I have a WF credit card I've had for 2 years with a perfect track record and a closed credit card that was in good standing. I have 4 student loans that show up that all late payments on them, unfortunately since they are combined payment when you miss one payment it hits all 4 accounts since Nelnet reports them all separately.

I have a closed auto loan with some late payments on it too but also a couple auto loans that were good.

Basically all i have "Open/Active" right now is my one WF credit card and my student loans.

Also, these two charge-offs don't report any payment activity, good or bad. it just says charge-off. They are not currently reporting monthly and haven't since 2/2016 which is when I paid them.

Givent that I have multiple other accounts with late payments etc I wouldn't expect a large increase in points, but anything is better than nothing.

My next 3 oldest accounts, I have a couple auto loans opened in 2008 and 2009 but they were only open for 6 months and a year, then I have an open auto loan from 2009 that I paid off a few years ago. Then there are a handful of accounts opened in 2011.

Re: remove charge-off or keep for AAOA?

RobertEG — Mon, 19 Mar 2018 08:35:58 GMT

If an account has prior derogs, either in the form of monthly delinquencies or a charge-off, and the account is now paid, then the current status is no longer one of delinquency.

CRA policy is to exclude an entire account once the derogs become eligible for exclusion IF the current status remains one of delinquency.

However, if the current status is no longer one of a delinquency (such as paid or settled), then the CRA will exclude only the derogs, and not the entire account.

The post states that the debt is paid, and thus the account is no longer one of a current delinquency status.

Thus, CRA policy should not result in exclusion of the entire account, which will remain without derogs until the CRA eventually delete based on their housecleaning removal of old accounts at approx 10 years from date of closure.

Re: remove charge-off or keep for AAOA?

Sneakytiki — Mon, 19 Mar 2018 11:35:12 GMT

Awesome info, so a paid charge off has to have lates on the account for it to report negative? That means, for me, my old 90 day late from 2013 is killing my scores and not a paid charge off from 2015/16?

Re: remove charge-off or keep for AAOA?

RobertEG — Mon, 19 Mar 2018 16:29:33 GMT

No, a paid charge off does not have to have lates on the account for it to report negative.

Reporting of a charge-off IS the reporting of a late, in that the account was delinquent at that point in time, and additionally that it was also subjected to the accounting measure of charging the delinquent debt to profit and loss.

If an account that was subjected to a charge-off also had other reported monthly delinquencies that are in the same chain, they will all also become excluded once 7 years has expired from the date of initial delinquency. With the monthly delinquencies all becoming excluded at 7 years from the DOFD, and the charge-off also becoming excluded on that same date, or no later than an additonaly 180 days thereafter, you will not have monthly delinquencies in the chain remaining after the charge-off. They are all statements of PRIOR account delinquencies.

A charge-off is the most serious of major account derogs, and is having the most significant scoring impact. Whether or not a prior 90-late was reported is essentially moot, as it is inherent that a charge-off was almost invariably 90-late at a prior time, irrespective of whether the creditor chose to report each monthly delinquency.

Re: remove charge-off or keep for AAOA?

Sneakytiki — Mon, 19 Mar 2018 17:00:45 GMT

I get it now, thank you for the info.

Re: remove charge-off or keep for AAOA?

Anonymous — Sat, 09 Feb 2019 15:45:55 GMT

Hi FirstAscent and other contributors

I am also in similar situation in which I am trying to improve my scores for best mortgage rates. Would like to know what did you do FirstAscent and how it affected your scores. I also have a charge off that I would like to remove hoping for a positive effect rather than a negative effect to improve my mortgage scores to > 750 for the best rates. I have already been approved for mortgage loan but just want the best rate at closing when the time comes but I don’t know whether to attempt to get the charge off remove or just leave it as and consider refinancing when scores are better as well as interest rates. Below is my stats for where I am now as well as my last report in December for which I will be getting new report at the end of this month. Any advice is welcomed for I have been on the rebuilding for 4 years now and reading this forum has greatly helped me. My last Report for FICO 8 and Mortgage
Equifax. Transunion. Experian
743. 730. 731
M: 721. 728. 720

Present scores: 753. 740. 741
Respectively

Credit Card total line of credit 181450 for 19 CC
Present CC with balances/util/ cc limit all other cc has 0 balances
Walmart: 4157. (27.7%) 15000
Discover: 2233. (18.7%). 11900
Am Xpress: 2649. (11.3%) 23450
Capital: 1271. (23.9%) 5300
TOTAL: 10310

Overall utilization @5.7%
Have SL and another account which are in perfect standings.
AAOA: @4 yrs
Oldest acct charge off with 9 yrs
Next oldest 5 yrs and others @ 2-4 yrs

Old charge off 1/2014 actually closed 10/2013 and I paid it off 11/2014
Account was open in 2010.
Only other derogatory is 2 -30 day lates in 11&12/2012 lates on a closed account
that was in good standing since then.

Thanks again for any replies.