Derog Vs. 80% util?

[laryn41]

Would it be better keep a derog on my report or pay it using a credit card and use up  alot of the Utilization on the card I would usr to pay it off?

[fused]

what is the derog and how old is it?

[Anonymous]

Depends on if paying off the derog removes it, how old the derog is, and whether it's your most recent derog.

If paying off the derog doesn't remove it, there's not much value to be had in paying it off.

If the derog is less than three years old (90 day late or more) or less than two years old (30-60 day late) AND you have a PFD AND the derog is your most recent, then yes, I'd say it's worth taking the utilization hit. Utilization hits are easy to recover from--just pay down the balance over the next few months and your score will recover.

OTOH, if the derog is five years old and you have a more recent derog, even removing it from your file isn't going to help very much.

[Anonymous]

---

laryn41 wrote:

Would it be better keep a derog on my report or pay it using a credit card and use up  alot of the Utilization on the card I would usr to pay it off?

---

I am not sure if you are referring to a collection or not, but if so, it will stay on your report even if you pay it. 

"The presence of...collections are powerful predictors of future payment risk. If these are valid...paying off the collection will not remove them from your credit report. The fact that they occurred is still predictive of future payment risk and will be considered by your FICO score." MYFICO.com

Will they accept a PFD? And if so, how fast could you pay down the card afterwards?

[laryn41]

It is afni and it is 1600 and it is from 04

[laryn41]

it is a collection.

[laryn41]

That is my only derog.

[SpecFile]

Message Edited by SpecFile on 09-03-2007 02:28 PM