@Anonymous wrote:
I was recently denied for a private student loan with Discover Student Loan and also did not prequalify with College Ave. I may have to sit out this year to build my credit with the intent of being approved by say January term since I do not have a cosigner.
The denial notice highlighted chargeoff on credit file and delinquent past or present credit obligations as reasons for decision.
All of my current accounts are in good standing. I have a charge off with:
Dade County Federal Credit Union. last reported as CO $2396 in Mar 2016 (on record until 9/2022, per experian report)
South Florida Education (SFED) Credit Union first CO $430 reported Sep 2016 (on record until 1/2023, per experian report)
One Main Financial CO first reported 12/2015. Last reported CO in 2017 and listed as CLS (i do not see the "reported until" date listed for this account)
My questions are:
I notice the SFED account, has reported a CO of $430 every month since 2016. Do these charge off accounts that report CO balances currently hurt more my score more than the other two CO accounts that have not reported anything since 2016/17?
I was advised to ask for a PFD but they would not. Since I need to get my scores healthy enough to be approved for a loan without a cosigner, will paying the chargeoff for that acct that reports currently help me or hurt me in my goal? (My scores right now are roughly
ex 649, eq 676, tu 699)
I was also consdering paying it since discovers reason for loan denial included: chargeoff on credit file, delinquent past or present credit obligations.
Lastly, Do chargeoffs definitely get sold to a Collection agency? Im wondering if these fall off my credit, will i then have to worry about them reappearing from a collection agency.
Please help me come up with a plan. I did not think I would still be denied credit due to CO from 2016. Without a loan, seems like a dream deferred.
Sincerely,
Held off by charge-offs
I am still denied credit from baddies days away from 7 years old.
Collection accounts are way worse than charge offs for several reasons. They put you in a public record scorecard with a lower possible high score ceiling, and look really bad. If these charge offs come off or continue to stay, they can add a collection account (if they enlist one for assistance in collecting or sell the debt), it is a double whammy on your credit - two bad accounts for the price of one - at any time up until 7 years (or potentially 7 years 180d, max, but generally 7 years).
For examole, I have no charge offs on my credit and no lates, and scores in the low 700s, but have 3 x CAs almost 7 years old and almost always denied for credit.
On the other hand, my SO has 1 x unpaid CO that is 5+ years old and updates every month (and when apping, he had 2 x COs, 1 has since aged off), with a few lates on it and no collection accounts, and only slightly lower scores than me, and has been approved for any type of credit he has applied for, so far.
Not to say he is bullet-proof, but the proof is in the details, collections are the worst, along with other public records like bk, fc, repo, and any baddies can and will be held against you until they come off your credit reports completely. It is risk and they weight risk and your past behavior when deciding to extend credit.
COs that are sleeping quietly are best left that way, when sleeping, your scores can recover. If they update (due to payment or dispute), they could tank your scores (specifically disputing will for sure, paying may help, hurt, or make no difference). The one uodating regularly would be best if paid, so it can stop updating regularly and your scores can recover.
