topic 88% Utility, WOW! in Rebuilding Your Credit

88% Utility, WOW!

Anonymous — Fri, 07 Aug 2009 19:31:33 GMT

I just found out that I have a charge off account that is due to drop off in March 2010 that is absolutely killing my utility %. It's a $3800 balance and I would really like to get this thing taken care of now instead of later. Its still with the original creditor and I'm thinking of sending a PFD, so we can proceed forward with buying a house this year.

My middle score right now is 603 with this info on my file. Do you think I could recover 18 points if I pay this debt off so that my utility would go to less than 6%?

Any thoughts for those more knowledgable that I?

Thanks

Re: 88% Utility, WOW!

Anonymous — Fri, 07 Aug 2009 21:30:36 GMT

Maybe, maybe not.

There are a few aspects to this account:

- The CO and balance

- The account age

The first is hurting, the second may be helping. Which is doing more, it is hard to say. But there often arises cases in which a derog TL is removed and FICO actually goes down because it adversely affects AAoA and also potentially rebuckets you (known to drop scores initially).

What is your oldest account? What is your AAoA? How will PFD affect AAoA?

Message Edited by txjohn on 08-07-2009 02:30 PM

Re: 88% Utility, WOW!

Anonymous — Fri, 07 Aug 2009 22:11:14 GMT

I had two small charge-offs that were hurting my util (I had no open credit cards, either). The myFICO estimator thought I'd get 20+ points for paying the balance down, so I did it. I did get a jump, but it was only 10 points.

My only guess is that (a) the simulator isn't as accurate as I'd hoped, or (b) perhaps I had a simultaneous ding when my 'status of' date was obviously updated when it went to zero, making it look more recent...?

In any event, I had hoped for better results than I got, so it's hard to tell.

Re: 88% Utility, WOW!

westo12 — Sat, 08 Aug 2009 04:09:43 GMT

I paid off a $1468 charged off (opened in 2004, did not ask for a delete) that was affecting my util (68%) and after that reported, my util was down at 20% where it should have been reporting and I gained 40 pts from it.

I also have tons of baddies, so I was only expecting a 20 pt increase and was PLEASANTLY surprised at the gain.

Re: 88% Utility, WOW!

RobertEG — Sat, 08 Aug 2009 04:35:22 GMT

ncphotoman, you have a dilemma.

You have, from what you have said, an unpaid balance on an OC account of $3800. That upaid balance is still being factored into your % util, even though closed. The OC reporting, along with their CO, are major derogs.

You say that it is "due to drop off in March 2010." But upon what do you base this?

What is the DOFD on the OC account?

Right now, in addition to the increase that this unpaid balance is affecting your %util, it is also a major derog as a CO.

The drop of the underlying prior OC account delinquencies is 7 years from each, but the drop-off date for the CO is 7 1/2 years from the DOFD on the OC account. They have different drop off dates.

And if your CR problems are directed to application for a mortgage loan, be aware that those "drop off" dates have exemptions.

FCRA 605(b) states that the drop-off dates of FCRA 605(a) are not applicable in the case of any consumer report to to be used in connection with any credit transaction involving a principal amount of $150,000 or more.

Re: 88% Utility, WOW!

Anonymous — Sat, 08 Aug 2009 07:18:19 GMT

Thanks for the help everyone!

My oldest account- Mortgage 1993

Average Account Age- 10 years 11 months

Account to be PFD Opened in 01/1995

Date of First Delinquincy: 7/2003 per Equifax (Experian says it is due to drop March 2010 on their report)

I've only opened one new account in the last 8 years or so.

Equifax shows me at 100% utility by their report. I know it may be crazy to wake a sleeping dog, but I just can not imagine it killing my score any worse than what it is right now. If I go from 88%-100% utility to 6-12% utility with one payment.........gosh lets hope that doesn't make it worse.

Doesn't FICO says that 35% of our score comes from our utility? I know no one know for sure what will happen and I posted this to get as much feedback as possible from everyone that has seen this type of stuff before. Thanks everyone for your input and information. If anyone else has a story to tell or advice, I'd love to hear more.

Message Edited by ncphotoman on 08-08-2009 12:18 AM

Re: 88% Utility, WOW!

llecs — Sat, 08 Aug 2009 10:28:29 GMT

I'd PIF w/out a PFD.

You'll see much more than 18 points returned. And assuming I'm wrong, you could always GW later. Ditto on the age though. DW only got a CO removed and she lost points because it was one of her oldest.

Re: 88% Utility, WOW!

westo12 — Sat, 08 Aug 2009 23:50:56 GMT

CO's count against AAoA's?? Dang... I learn more and more every day here!!

Re: 88% Utility, WOW!

llecs — Sun, 09 Aug 2009 00:35:17 GMT

nykorh wrote:
CO's count against AAoA's?? Dang... I learn more and more every day here!!

Yep, all OC accounts, good or bad, open or closed, count towards AAoA. CAs and PRs do not.

Re: 88% Utility, WOW!

westo12 — Sun, 09 Aug 2009 00:39:34 GMT

I'm sorry, up above you said "CO". I saw CO and thought "Collection", but a CO is a charge off. I misunderstood. Thanks!

Re: 88% Utility, WOW!

westo12 — Sun, 09 Aug 2009 00:41:39 GMT

Say I have two CO's:

1. first one opened 4/04, high limit/bal $500, reporting 120 late 2006

2. second one opened 10/04, high limit/bal $1500, reporting 120 late 2006

If I wanted to select ONE for a GW, would it be #2 since it is newer than #1? Or does the high limit/bal matter in terms of reporting?

Re: 88% Utility, WOW!

llecs — Sun, 09 Aug 2009 00:59:24 GMT

I'd GW them both since they are paid. Tailor the GW to ask them to remove any lates/CO reference. If your AAoA is 5 yrs or older then I'd ask them to delete.

The CL doesn't factor into util if the CC is paid off and will never factor again (unless you have a super-amazing CCC that would reopen it for you).

Re: 88% Utility, WOW!

westo12 — Sun, 09 Aug 2009 01:03:28 GMT

I hadn't considered asking them to re open. This is an option IF they don't do a new hard pull. That would be cool... Doesn't hurt to ask! Might just try that.

Re: 88% Utility, WOW!

Anonymous — Sun, 09 Aug 2009 14:08:10 GMT

@Anonymous wrote:
Thanks for the help everyone!

My oldest account- Mortgage 1993
Average Account Age- 10 years 11 months

Account to be PFD Opened in 01/1995
Date of First Delinquincy: 7/2003 per Equifax (Experian says it is due to drop March 2010 on their report)

I've only opened one new account in the last 8 years or so.

Equifax shows me at 100% utility by their report. I know it may be crazy to wake a sleeping dog, but I just can not imagine it killing my score any worse than what it is right now. If I go from 88%-100% utility to 6-12% utility with one payment.........gosh lets hope that doesn't make it worse.

Doesn't FICO says that 35% of our score comes from our utility? I know no one know for sure what will happen and I posted this to get as much feedback as possible from everyone that has seen this type of stuff before. Thanks everyone for your input and information. If anyone else has a story to tell or advice, I'd love to hear more.

Message Edited by ncphotoman on 08-08-2009 12:18 AM

Yes, you will gain points on the utility side of the equation, BUT you may lose points for a recent derog when the OC updates the account if they have not updated it in the last 2 years. Does it update monthly as a CO? If so you will probably gain points.