topic Question regarding Charge Off that was 1099'd in Rebuilding Your Credit

Question regarding Charge Off that was 1099'd

GreyvyTrain — Thu, 28 Mar 2024 13:37:03 GMT

Hello all, new here and new to my repair journey by about a year. I have a charge off from 5/3 bank for a secured credit card that seems to be constantly holding me back. It was charged off in 2019, with the first reported late being early 2019. I called them and they claim it was 1099-C back in 2021 or 2022. But I am wondering if I was to pay the charge off, to change the status to "paid-charge off" would that be worth it over the next 2.5 years that it will remain on my credit report? It's not a substatial amount of money that I owe, around 500$, but I guess I'm curious if it will help alleviate the delinquency aspect of it for the remainder of the time it is on my credit report? It is still reporting the unpaid balance on my credit reports, so I'm assuming it's hurting my utilization, but I feel like the deliquent status is really holding my back.

Any opinions, advice would be super welcome! Thanks!

Re: Question regarding Charge Off that was 1099'd

JoeRockhead — Thu, 28 Mar 2024 13:47:14 GMT

A paid CO is slightly better that an unpaid one but combined with the maxed out status reporting monthly is doing plenty of damage to your scores. I would recommend paying it off to alleviate at least that aspect of it.

It would also eliminate both the possibility of a seperate collections being reported, and potential SOL issues.

Re: Question regarding Charge Off that was 1099'd

GreyvyTrain — Thu, 28 Mar 2024 14:14:10 GMT

Thanks for the response! So it is reporting at 154% of the balance, $454/300 I see now. That doesn't necessarily hurt my overall utilization much as I think I'm around 6000$ total limit with everything combined. Is it the fact that it is reporting over it's original limit that you recommend paying it off, so it will atleast show paid and at a 0$ balance?

Re: Question regarding Charge Off that was 1099'd

JoeRockhead — Thu, 28 Mar 2024 14:41:18 GMT

@GreyvyTrain wrote:
Thanks for the response! So it is reporting at 154% of the balance, $454/300 I see now. That doesn't necessarily hurt my overall utilization much as I think I'm around 6000$ total limit with everything combined. Is it the fact that it is reporting over it's original limit that you recommend paying it off, so it will atleast show paid and at a 0$ balance?

Just based on this one card, you'd be OK on your aggregate UTI but, the bigger issue here is that even a single card maxed out can have a significant penalty on your scores. As I said above, paying it off will be most beneficial for you all the way around. Eliminate the high single card UTI, eliminate the possibility of the debt being bought by a collection agency and then having a collection added to your reports (not all collection agencies offer PFD). Eliminate any chance of the OC, or CA seeking a judgement.

To answer your other question, paying it off would then have it get reported as paid with a zero balance.

Re: Question regarding Charge Off that was 1099'd

GreyvyTrain — Thu, 28 Mar 2024 15:10:44 GMT

Got it, thank you very much for clarifying and explaining! I'm new to all this and greatly appreciate the help. I'll get with them today and get it all paid up.

Another question, maybe you could assist? - I have two other charge offs on my account for lower amounts, showing zero balance, but sold off to another agency. I do not have any collections listed, and it does not state who it was sold to. I know one company ended up closing, the other is Fingerhut, which I have already re-established an account and built up a good relationship with them on another line of credit. Is there any way to find out where the debt was sold to, or would I be able to contact fingerhut themselves and see?

Re: Question regarding Charge Off that was 1099'd

JoeRockhead — Thu, 28 Mar 2024 15:23:07 GMT

@GreyvyTrain wrote:
Another question, maybe you could assist? - I have two other charge offs on my account for lower amounts, showing zero balance, but sold off to another agency. I do not have any collections listed, and it does not state who it was sold to. I know one company ended up closing, the other is Fingerhut, which I have already re-established an account and built up a good relationship with them on another line of credit. Is there any way to find out where the debt was sold to, or would I be able to contact fingerhut themselves and see?

You can certainly ask Fingerhut about paying the old account off. You can also ask them who has the debt but they're not obligated to tell you. They might even tell you they (CSR) don't have access to that information. If neither of these two accounts are affecting your UTI, where these two COs are concerned, the approach of "don't poke the bear" might seem the appropriate thing to do and simply wait for them to fall off your reports.

Re: Question regarding Charge Off that was 1099'd

GreyvyTrain — Thu, 28 Mar 2024 18:46:07 GMT

Sounds good, I think I'll leave them alone as is. Thanks again for your advice.