Charge Off Effects

[CreditDrama85]

I let 3 accounts with high balances be charged off because i was tired of the interest.

i am currently in the process of repayment, but my fico score has actually gone up by several points. why is that?

someone please explain this, it seems kind of backwards

[fused]

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CreditDrama85 wrote:

I let 3 accounts with high balances be charged off because i was tired of the interest.

i am currently in the process of repayment, but my fico score has actually gone up by several points. why is that?

someone please explain this, it seems kind of backwards

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Good question! While it's true paying a collection will not lower or increase scores, the same cannot be said about making payments on a derogatory TL (CO) being reported by an OC.  A CO reporting by an OC will be listed on CRs as a derogatory TL and not a collection so rules are different. So it's possible for your scores to move up or down or not change at all when making payments on a derogatory TL account (CO) as opposed to a collections account.

[fused]

Just curious but what were the original CO balances and what are thery now?

[CreditDrama85]

one 3,000 and the other 4,000....both approx 500 less

[fused]

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CreditDrama85 wrote:

one 3,000 and the other 4,000....both approx 500 less

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Noted, thank you! I want to look further into this for folks in your situation, hang tight it might be awhile.

[Anonymous]

If the TLs were reported as delinquent revolving accounts, they count against utilization. Thus, as balances decrease, utilization decreases, and FICO scores go up.

Second, as time passes the chargeoffs age and have less negative impact. Especially if the OP has other revolving accounts in good standing, one would expect FICO to begin to recover 3 to 5 months after the chargeoffs.