topic Verizon CO wrecking utilization? in Rebuilding Your Credit

Verizon CO wrecking utilization?

dizzum — Wed, 02 May 2018 21:58:31 GMT

Working on fixing some credit issues after a nosedive after my daughters were born, in the hopes of buying a home in the next 6-12 months.

One thing that seems to be wrecking my score is that a Verizon charge-off is reporting as revolving credit, and my utilization is at 94% as a result of it -- which stings, considering my actual CC utilization is at about 3%.

Anything I can do about this? This can't be right, can it?

Re: Verizon CO wrecking utilization?

pipeguy — Wed, 02 May 2018 23:35:12 GMT

The 94% utilization is irrelevant on a "charged off" account. Utilization is based across-the-board meaning total revolving lines combined verses total revolving shown as a carried balance (you mentioned 3% which is ideal). While maxed out cards can be a red flag overall utility doesn't really care. I would suggest it is the charged-off-account which is hurting your score.

Verizon can be a big pain as far as getting them to report correctly it took me months plus complaints to BBB and CFPB before they would even look at the tradeline they charged off on me - it had nothing to do with me (not my account) but they kept verifying it as valid. I don't know how much the charge off is, but a paid account will be required to qualify for a mortgage - it might be time to make a payment deal with Verizon and at least get it changed to a paid account.

Re: Verizon CO wrecking utilization?

CH-7-Mission-Accomplished — Wed, 02 May 2018 23:44:40 GMT

@pipeguy wrote:
The 94% utilization is irrelevant on a "charged off" account. Utilization is based across-the-board meaning total revolving lines combined verses total revolving shown as a carried balance (you mentioned 3% which is ideal). While maxed out cards can be a red flag overall utility doesn't really care. I would suggest it is the charged-off-account which is hurting your score.

Verizon can be a big pain as far as getting them to report correctly it took me months plus complaints to BBB and CFPB before they would even look at the tradeline they charged off on me - it had nothing to do with me (not my account) but they kept verifying it as valid. I don't know how much the charge off is, but a paid account will be required to qualify for a mortgage - it might be time to make a payment deal with Verizon and at least get it changed to a paid account.

I'm not sure I understand what you mean by "it's irrelevant." If the Verizon is account is coded as a revolving account, and it has no available credit limit, the amount of that collection is being added to OP's actual revolving balances and then divided by OP's open and available revolving credit limits. The Verizon chargeoff should be coded as an installment or as a collection. It is not an open ended line of credit.

Re: Verizon CO wrecking utilization?

RobertEG — Thu, 03 May 2018 00:04:36 GMT

Credit accounts can be one of three different types.

They can be revolving, installment, or open (not to be confused with the term open as used to refer to the status of an account to further use).

Installment accounts involve repayment of a fixed chunk of change provided to the consumer, and have set installment payments and due dates.

Revolving accounts permit the consumer to determine the amount of debt to be accrued, up to the preset credit limit, with monthly payments then revolving around the current amount of the discretionary, and variable, debt assumed by the consumer. Credit cards and LOCs are typical examples.

"Other" type credit is due in full at a set date after providing the goods, services, or money.

Typical examples are medical debt and utilities.

Verizon is "other" type credit that is neither an installment loan nor revolving credit.

If being reported as revolving, it is affecting your scoring of revolving credit util and should be corrected.

I would first call Verizon and request informal correction. They know that they are not extending revolving credit, and will likely correct as a simple admin matter. If they decline to correct informally, then file a formal dispute, which compels an reasonable investigation and a formal decision of verification or correction. If they still verify, you can then file a complaint with the CFPB or bring your own civil action, thus getting it reviewed by the courts.

Re: Verizon CO wrecking utilization?

pipeguy — Thu, 03 May 2018 00:26:49 GMT

@CH-7-Mission-Accomplished wrote:
@pipeguy wrote:
The 94% utilization is irrelevant on a "charged off" account. Utilization is based across-the-board meaning total revolving lines combined verses total revolving shown as a carried balance (you mentioned 3% which is ideal). While maxed out cards can be a red flag overall utility doesn't really care. I would suggest it is the charged-off-account which is hurting your score.

Verizon can be a big pain as far as getting them to report correctly it took me months plus complaints to BBB and CFPB before they would even look at the tradeline they charged off on me - it had nothing to do with me (not my account) but they kept verifying it as valid. I don't know how much the charge off is, but a paid account will be required to qualify for a mortgage - it might be time to make a payment deal with Verizon and at least get it changed to a paid account.

I'm not sure I understand what you mean by "it's irrelevant." If the Verizon is account is coded as a revolving account, and it has no available credit limit, the amount of that collection is being added to OP's actual revolving balances and then divided by OP's open and available revolving credit limits. The Verizon chargeoff should be coded as an installment or as a collection. It is not an open ended line of credit.

If it is a charged off closed account with a balance there really is no "utility factor" no matter how it's coded it is a 100% "utility" closed by the granter account. While I don't know your listed "credit limit" on that account (correctly or incorrectly reported) if your overall utility is 3% its utility factor being reported in irrelevant to your score (1% to 9% overall utility score within the same "bucket"). The Charge-Off status is a much larger negative factor in your scores.

In other words, if you manage to get the account re-coded to "other" as RobertEG has suggested, and yet the Charge-Off status remains, I do not believe there will be any change in your scores due to the utility factor.

Re: Verizon CO wrecking utilization?

dizzum — Thu, 03 May 2018 13:30:35 GMT

My utilization, when calculated manually, is at 3%.

The CRA's are reporting it at 96% because of the collections.

They have it listed as revolving with TU and EQ, both of those are showing 96% util. EX is reporting as an installment loan, and my util is showing correctly there. My EX also happens to be 40 points higher than TU and EQ with no other differences -- so I know for a fact that the incorrect reporting is making it nosedive.

Re: Verizon CO wrecking utilization?

pipeguy — Fri, 04 May 2018 01:50:41 GMT

@dizzum wrote:
My utilization, when calculated manually, is at 3%.

The CRA's are reporting it at 96% because of the collections.

They have it listed as revolving with TU and EQ, both of those are showing 96% util. EX is reporting as an installment loan, and my util is showing correctly there. My EX also happens to be 40 points higher than TU and EQ with no other differences -- so I know for a fact that the incorrect reporting is making it nosedive.

You can file a dispute with TU and EQ to get it coded "correctly" however by doing that you acknowledge it as valid. Deal with the problem which is the debt rather than the coding issue. You seem to be stuck on the noise rather than the cause.

Re: Verizon CO wrecking utilization?

dizzum — Fri, 04 May 2018 12:35:26 GMT

My concern is that I was told by a mortgage broker I chatted with that the risk of paying the debt now is that its existence isn't hurting me from a mortgage standpoint due to being 3-4 years old and it not reporting monthly, but the utilization % is hammering me. I was advised to not pay it until I obtain a mortgage.