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To Pay or Ignore

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To Pay or Ignore

Hello Guys, 


I have been on a journey to try to clear up my reports. To make a very long story short, I inherited a home from a family member, and need to clean up my credit enough to refinance the mortgage into my name. I feel as though I am on borrowed time, and need to take care of this. 


So far... I've managed to clean up my reports with everything but one account, through settlements. The last account is a Bank of America credit card, which was partially secured by a security deposit. Speaking briefly to the account recovery team, they told me all they would do is update the balance to zero. 


The account balance is $348, charged off in October of 2021. Originally $447 was owed. $500 Limit. It reports every single month, consistently on the 15th. 


One of the things, I just do not understand is... if paying this off makes any sense whatsoever. I was already told by a mortgage broker, that the mortgage underwriting would ignore accounts this small. But... far, more importantly, I am concerned about long-term things. Does it make sense to pay off this charge off, when it will continue to report? Will I see any score boost, or will things get worse? 


Is there any magical department inside of Bank of America, that may decide their $348 is worth more than punishing me? 


Thanks to all of you, in advance. 








Message 1 of 3
Community Leader
Super Contributor

Re: To Pay or Ignore

Welcome @ShortyGal103 

Anything thats settled or paid off helps in many ways. CO will stop reporting each month as a CO on the 15th. Major blow. You paid your debts to show future lenders. It will fall off 7yrs after the DoFD. And you'll get a small bump. Its a win win. Be done with it.

Homeowner since Sept 2020. 2021 Explorer ST Chase 3.1%. Sharing my experiences after BK from learning here. Started 540's.
Message 2 of 3
Regular Contributor

Re: To Pay or Ignore

Paid it off or settle. The charge off will stop reporting, and you should see some improvements in your scores.

Starting FICO 8 Scores:
Current FICO 8 Scores:
Message 3 of 3
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