Charge-Off's count toward Utilization? This is CRUSHING me

[The_Rooster]

"Managed by" ... Does that mean it was not sold to them, Chase just allows them to collect the debt FOR them?

Because my Credit report has 0 collection accounts, and Chase still shows a $5,200 balance on the chargeoff.

I want to settle this account and get it down to $0 because it is killing my utilization, but I don't want to deal with a scummy debt collecter. Would rather deal with Chase.

[The_Rooster]

Anyone have any idea?

[Remedios]

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@The_Rooster wrote:

"Managed by" ... Does that mean it was not sold to them, Chase just allows them to collect the debt FOR them?

Because my Credit report has 0 collection accounts, and Chase still shows a $5,200 balance on the chargeoff.

I want to settle this account and get it down to $0 because it is killing my utilization, but I don't want to deal with a scummy debt collecter. Would rather deal with Chase.

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 Hi and welcome to the forums 

If Chase wont take payment from you and it's directing you to United Collection Bureau, you dont have a choice but to deal with them. 

If you haven't already, call Chase, let them know you want to talk about payment on a charged off account. They will advise you from there

[Brian_Earl_Spilner]

What did Chase say when you called and asked them about it? If you haven't called them, that should be your first step. Also, if you ever want another Chase card again, you should pay in full, not settle. Much laess hassle.

[The_Rooster]

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@Brian_Earl_Spilner wrote:

What did Chase say when you called and asked them about it? If you haven't called them, that should be your first step. Also, if you ever want another Chase card again, you should pay in full, not settle. Much laess hassle.

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When I call Chase, it asks me to enter my account #, and then it immediately directs me to the Collection agent.

But if it's with a collection agency, it should not show  balance on my bureau with chase...

[The_Rooster]

Just got off the phone with Chase.

They explained that they did NOT sell the account.

They simply let United Collections MANAGE the account for them, but Chase still owns it.

They offered to settle the $5,300 account for $2,300.

Should I take it?

They said it will make the balance $0 on my credit, but did not say what "designation" it would have (paid charge off, settled, etc).

According the MyFico score simulator, removing this debt from $5,300 to $0 would increase my scores 65 points. 

My Equifax supposedly would go to a 700, Transunion to 688, and Experian to 695.

However, I don't know if what bad designation they put on the account will lower those simulated numbers.

[Brian_Earl_Spilner]

Ignore the simulators. You won't get that kind of jump until your reports are clean. If this is your only derogatory, it'll be 7yrs 6 mos from first default. If you have other derogatories, it may jump a few points or others have reported a score drop for some reason. The account will just show closed and at $0. They'll put in the comments it was settled which will only matter on a manual review by a lender. If you can't afford to pay in full, then settle, but again, if you want to get back with Chase in the future, you should pay in full. They may not give you another card, or they'll hold it over your head forever.

[The_Rooster]

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@Brian_Earl_Spilner wrote:

Ignore the simulators. You won't get that kind of jump until your reports are clean. If this is your only derogatory, it'll be 7yrs 6 mos from first default. If you have other derogatories, it may jump a few points or others have reported a score drop for some reason. The account will just show closed and at $0. They'll put in the comments it was settled which will only matter on a manual review by a lender. If you can't afford to pay in full, then settle, but again, if you want to get back with Chase in the future, you should pay in full. They may not give you another card, or they'll hold it over your head forever.

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I don't know why they even provide the simulators when they're worthless.

Chase has been reporting this at CO for nearly a year now, so I don't think the DOFD is going to change.

[RobertEG]

When a payment discharges a debt, regardless of whether it is paid in full or whether the creditor agrees to a settlement for less, the current status becomes Paid, and the current balance must be updated to $0.

The CRAs additionally, and optionally, permit a creditor or debt collector to also report the current status as Paid, with the addition of the special comment that it was settled for less than the full debt.  That is at the reporting discretion of the creditor, and if used, informs others that the consumer did not pay their entire debt obligation.  That is never a favorable comment, as it informs others that if they lend to you, they may take a loss, as you have a history of not paying your entire debt.

If a creditor agrees only to report Paid, with no reference to the additional fact that it was settled by acceptance of less than its full amount, that is substantial, as your credit report will then appear the same as if you had paid the entire amount.

[Anonymous]

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@RobertEG wrote:

When a payment discharges a debt, regardless of whether it is paid in full or whether the creditor agrees to a settlement for less, the current status becomes Paid, and the current balance must be updated to $0.

The CRAs additionally, and optionally, permit a creditor or debt collector to also report the current status as Paid, with the addition of the special comment that it was settled for less than the full debt.  That is at the reporting discretion of the creditor, and if used, informs others that the consumer did not pay their entire debt obligation.  That is never a favorable comment, as it informs others that if they lend to you, they may take a loss, as you have a history of not paying your entire debt.

If a creditor agrees only to report Paid, with no reference to the additional fact that it was settled by acceptance of less than its full amount, that is substantial, as your credit report will then appear the same as if you had paid the entire amount.

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Is there actually any legal documentation that this must occur?  I settled a debt for less than the full balance (paid $2885 to settle a balance of $3606) with State Farm Bank concerning a charged off credit card.  They are reporting the deficit of $721 as a balance on my CR to EF and EX (but not TU for some strange reason) and ALSO as a Past Due amount.  

I have a letter from the CA that represented them (Sessoms and Rogers) that the account "has been resolved as settled in full for the total settlement amount of $2885."   I just sent them a dispute letter outlining that I believe the balance should be zero and attached a copy of the settlement confirmation letter.  I know I have to wait to hear back now but they were completely obstinate when I tried to talk to them about this on the phone and twice rejected disputes submitted online via EF and EX.

This one issue is causing me major frustration in working with mortgage brokers.  I've been told I need to get it cleared up and should see a substantial score improvement.

Is there a way to get an account excluded from your credit report by mortgage underwriters if it's obviously in error and the normal dispute process isn't working?