HELP! Revolving credit balances too high...

Anonymous · ‎03-08-2019

Hello. New to this site. I've been working hard to repair my credit over the last 6 months or so and have seen significant improvemnts, but my FICO scores are still just above fair and almost poor. I think a big reason for this is my revolving credit blances is too high, its at 104%. My question is this. Almost all my "revolving credit" thats showing, is in charged off and closed accounts, my current accounts are paid in full every month. I know paying collections doesnt up your score, as it stays as a negative remark until they delete it or stop reporting it. How can I pay this balance down to where it ups my score? I have the funds to pay off every account in bad standings, in full, but I know paying collections doesnt help. What are any other options to get that revolving credit amount down?! Tx guys.

Anonymous · ‎03-08-2019

@Anonymous wrote:
Hello. New to this site. I've been working hard to repair my credit over the last 6 months or so and have seen significant improvemnts, but my FICO scores are still just above fair and almost poor. I think a big reason for this is my revolving credit blances is too high, its at 104%. My question is this. Almost all my "revolving credit" thats showing, is in charged off and closed accounts, my current accounts are paid in full every month. I know paying collections doesnt up your score, as it stays as a negative remark until they delete it or stop reporting it. How can I pay this balance down to where it ups my score? I have the funds to pay off every account in bad standings, in full, but I know paying collections doesnt help. What are any other options to get that revolving credit amount down?! Tx guys.

Whoever told you paying collections does not help is wrong. If you have the funds, you need to pay those accounts asap. Your ultimate goal is a Pay For Deletion agreement, but even if they won't go for that, paying off these accounts will allow them to start to age. Paying these accounts will also look better under a manual review.

Those closed accounts with balances are maxing out your utilization, which is costing you major points.

Anonymous · ‎03-08-2019

Agreed. You want to negotiate PFDs immediately. If you're willing to PIF, your chances of success are much greater than someone that's trying to low-ball for a lesser amount. Say you'll pay them off today, but prior to doing so you'd like a letter stating that once payment is received they agree to remove the negative.

Anonymous · ‎03-08-2019

Yes I was aware of the PFD method. I actually called 2 of my 3 bad standings and they said they cant and wont do that, even when I incinuated I wouldnt pay at all unless they deleted the bad remarks, they wouldnt budge. It would be reported as paid or settled through collections. I have heard so many people, even debt consolidators, say that paying collections does NOT get the bad mark taken away. I found it weird though, because the revolving balances I have on my report are all deliquent accounts. So.. If I pay collections, those balances will be reported as 0, but the fact that it was so deliquent will remain? So it DOES help some? Just not the whole way??

Anonymous · ‎03-08-2019

@Anonymous wrote:
Yes I was aware of the PFD method. I actually called 2 of my 3 bad standings and they said they cant and wont do that, even when I incinuated I wouldnt pay at all unless they deleted the bad remarks, they wouldnt budge. It would be reported as paid or settled through collections. I have heard so many people, even debt consolidators, say that paying collections does NOT get the bad mark taken away. I found it weird though, because the revolving balances I have on my report are all deliquent accounts. So.. If I pay collections, those balances will be reported as 0, but the fact that it was so deliquent will remain? So it DOES help some? Just not the whole way??

Do you have any open revolving accounts right now?

Anonymous · ‎03-08-2019

OP, you said your open lines aren’t helping but they probably are. If you didn’t have them, your utilization might be even higher.

The replies above are correct - pay them with or without a PFD - that’ll update them to zero balance, and then your utilization will drop to only reflect your open lines of credit. This will help your score immediately. Plus, as stated above, the delinquent accounts will be paid up and will no longer update. As they age, their impact begins to lessen with time. Yes, the paid/charged off entry notations will remain and will hurt your score, but not nearly as much as having open, unpaid collections out there that are refreshing (in the eyes of FICO) through monthly updating of the charged off status.

With regard to PIF on all of your open lines, let one report a small balance each month, $7-10 or so, and then pay it after the statement cuts. Reporting zero on all lines will ding your scores for not using any of your credit.

Anonymous · ‎03-09-2019

@Anonymous wrote:
@Anonymous wrote:
Yes I was aware of the PFD method. I actually called 2 of my 3 bad standings and they said they cant and wont do that, even when I incinuated I wouldnt pay at all unless they deleted the bad remarks, they wouldnt budge. It would be reported as paid or settled through collections. I have heard so many people, even debt consolidators, say that paying collections does NOT get the bad mark taken away. I found it weird though, because the revolving balances I have on my report are all deliquent accounts. So.. If I pay collections, those balances will be reported as 0, but the fact that it was so deliquent will remain? So it DOES help some? Just not the whole way??
Do you have any open revolving accounts right now?

Yes. Only one thats mine. A small 300 dollar secured card. I'm on my relatives as a authorized user, but I dont think that counts at all.

Anonymous · ‎03-09-2019

@Anonymous wrote:
OP, you said your open lines aren’t helping but they probably are. If you didn’t have them, your utilization might be even higher.

The replies above are correct - pay them with or without a PFD - that’ll update them to zero balance, and then your utilization will drop to only reflect your open lines of credit. This will help your score immediately. Plus, as stated above, the delinquent accounts will be paid up and will no longer update. As they age, their impact begins to lessen with time. Yes, the paid/charged off entry notations will remain and will hurt your score, but not nearly as much as having open, unpaid collections out there that are refreshing (in the eyes of FICO) through monthly updating of the charged off status.

With regard to PIF on all of your open lines, let one report a small balance each month, $7-10 or so, and then pay it after the statement cuts. Reporting zero on all lines will ding your scores for not using any of your credit.

Thanks man. That sounds like really good advice and was informative.

Anonymous · ‎03-09-2019

@Anonymous wrote:
OP, you said your open lines aren’t helping but they probably are. If you didn’t have them, your utilization might be even higher.

The replies above are correct - pay them with or without a PFD - that’ll update them to zero balance, and then your utilization will drop to only reflect your open lines of credit. This will help your score immediately. Plus, as stated above, the delinquent accounts will be paid up and will no longer update. As they age, their impact begins to lessen with time. Yes, the paid/charged off entry notations will remain and will hurt your score, but not nearly as much as having open, unpaid collections out there that are refreshing (in the eyes of FICO) through monthly updating of the charged off status.

With regard to PIF on all of your open lines, let one report a small balance each month, $7-10 or so, and then pay it after the statement cuts. Reporting zero on all lines will ding your scores for not using any of your credit.

I did talk to a rep on the phone... he said paying down the utilzation through collections would help... but only very minimally, a few points. It could go up a lot (20-30 pts) if an account was deleted. So if they refuse to delete, paying them through collections will drop my utilization only, and will only up my score like 5 points or so, he said.

Anonymous · ‎03-09-2019

Decreasing your CC utilization from > 90% to 1-4% should help you a huge amount, not just a few points.

But you are also right that your derogs will still be on your reports and those will hurt your scores a lot.

It is very common to get the answer of "no" the first time you reach out to a creditor to discuss a PFD arrangement. The mistake is assuming that what that one rep says represents the final position of that company. Phrased differently, it is a mistake to assume that repeatedly circling back with the same question over six months will not eventually get you someone who will help.

The folks in the Rebuilding Forum know a lot about this and I suggest you huddle with them getting advice from several people -- take your time to get more than one perspective.

It's quite possible, however, that you don't have 6-11 months to conduct a PFD campaign -- maybe you need an immediate score boost now so that you can buy a house (for example). If so, you should make one more try at the PFD and then if that doesn't work, pay them in full. Just be aware that if you want to have any chance of getting these very serious derogs deleted, the time to do that is BEFORE you pay. After you pay them you will have lost all leverage that you had in this regard.