topic Re: Effect of Charge Off Settlement with MRS BPO in Rebuilding Your Credit

Effect of Charge Off Settlement with MRS BPO

db111 — Sun, 09 Jan 2022 06:02:22 GMT

I'm bouncing back from a hellacious 2019 to 2021 - COVID and Job Loss

Prior to Mid 2020, credit scores were around 720. When the well started to run dry, I called Chase to make them aware of my situation and see what if anything they could do. Essentially they offered me a deal that would save me $37 per month on $15K of credit card debt, that prior to that point I had no problem paying down on the 3 CC accounts.

Eventually these 3 cards were charged off as I had to make tough choices for between mortage payments and kids tuition. For last few months I've been climbing back from financial devastation having brought all of my accounts current and in good standing with the exception of these 3 charged off CC from Chase, and one other CC that I have already settled on.

I just received 3 settlement letters from MRS BPO for the 3 accounts with Chase. The offers are so low, I can actually pay right now. My questions are:

I presume these will get reported as settled or paid for less than full amount. How, if at all, is this likely to affect my scores which are around 650 right now even with these charge offs?
Is it true lenders frown upon settled accounts?
Is there any decent chance that I can get an agreement from MRS to have Chase report the TLs as PIF?

Thanks for any guidance.

Re: Effect of Charge Off Settlement with MRS BPO

OmarGB9 — Sun, 09 Jan 2022 07:03:41 GMT

@db111 wrote:
I'm bouncing back from a hellacious 2019 to 2021 - COVID and Job Loss

Prior to Mid 2020, credit scores were around 720. When the well started to run dry, I called Chase to make them aware of my situation and see what if anything they could do. Essentially they offered me a deal that would save me $37 per month on $15K of credit card debt, that prior to that point I had no problem paying down on the 3 CC accounts.

Eventually these 3 cards were charged off as I had to make tough choices for between mortage payments and kids tuition. For last few months I've been climbing back from financial devastation having brought all of my accounts current and in good standing with the exception of these 3 charged off CC from Chase, and one other CC that I have already settled on.

I just received 3 settlement letters from MRS BPO for the 3 accounts with Chase. The offers are so low, I can actually pay right now. My questions are:
I presume these will get reported as settled or paid for less than full amount. How, if at all, is this likely to affect my scores which are around 650 right now even with these charge offs?
Is it true lenders frown upon settled accounts?
Is there any decent chance that I can get an agreement from MRS to have Chase report the TLs as PIF?
Thanks for any guidance.

1. Is MRS BPO reporting in addition to Chase, or is only one or the other reporting? The answer to your question will vary depending on who's reporting.

2. Yes and no. It just varies by lender. But a paid derogatory is better than an unpaid one.

3. No chance unless you actually PIF.

Re: Effect of Charge Off Settlement with MRS BPO

db111 — Sun, 09 Jan 2022 07:11:24 GMT

@OmarGB9 Right now, only Chase is reporting.

Re: Effect of Charge Off Settlement with MRS BPO

OmarGB9 — Sun, 09 Jan 2022 07:36:07 GMT

@db111 wrote:
@OmarGB9 Right now, only Chase is reporting.

Then if this account is updating monthly with the "CO" status, paying it will stop those monthly updates, and the utilization hit will go away (charge offs are counted as maxed accounts), which may actually provide some point boosts.

Re: Effect of Charge Off Settlement with MRS BPO

hd1218 — Wed, 11 May 2022 05:48:20 GMT

Any update on how you decided to proceed? I'm in a similar predicament with chase/mrs bpo. Trying to weigh my options as I eventually want to be a chase cardholder again in the future.

Re: Effect of Charge Off Settlement with MRS BPO

JM761 — Wed, 11 May 2022 15:35:50 GMT

@hd1218 wrote:
Any update on how you decided to proceed? I'm in a similar predicament with chase/mrs bpo. Trying to weigh my options as I eventually want to be a chase cardholder again in the future.

I am not the original poster but I recently took a similar settlement. Charge off was on my CR with Chase. Called Chase directly and settled on 3/30. It will take 30-60 days to be updated (so far, not updated yet). When it does, it will be reported as: "Paid for less than full amount". Chase and other big banks will not "pay for delete" so the charge off is on my report until 7 years after the DOFD (date of first delinquency). It's unfortunate but I understand.

The good news is the Myfico gurus in the group say that a paid charge of is better than an unpaid one! Credit score is expected to go down a little bit initially b/c now I have a recently updated chargeoff *but* the balance will not be $0 and reported as "paid" so my debt ratio will change and the effects of a paid charge off are less than that of an unpaid. I trust the group's advice so I wanted to share it with you - they haven't steered me wrong so far

Also, I just wanted to add, apparently chase has a very long memory. Once they charge off one of your cards there is no hope of getting back in with them (even after 10+ years). At least, that is what I've read in these forums. I'm bummed about that - wish I was able to keep a card with them but I'm focusing on rebuilding and getting a better card elsewhere.