C/O and utilization

[Anonymous]

OK so i'm new to the whole credit repair thing but i'm learning my lessons quickily. So my question is if I have a C/O showing a balance is that whats keeping my score in the dumps? I noticed today that my revolving credt has a utilization of 116%! I'm thinking if I pay this off even though it's a charge off will that lower my utilization and possibly help my score, I am thinking this is why my score stayed the same after I had a judgement and a lien deleted both of those going away did nothing at all. Is it the HIGH utilization. Thoughts?

[Anonymous]

You got it---a charge off with a balance will absolutely factor into utilization, and paying it off should help your score.

I was in a similar situation not too long ago and saw a very nice jump by paying---especially before they sell the debt to a collection agency.

[tri3nity]

I was wondering about this also. So should I offer a settlement with it being a chargeoff already or pay it in full?

[Anonymous]

Same boat here ....

Had a chargeoff with Discover that was holding 116% utilization. I figured paying it off would give me a huge score jump versus settling. I paid Discover a little over $6300 in full & you know what score increase I got?

...... a whopping 17-25 pts across the bureaus. I wish I would have settled, but at least I get the peace at mind to move along with my life now. I was honestly hoping for a minimum of 40 points added on each bureau. I went from 116% utilized down to zero & got not too much to show for it. Hopefully my new Cap1 card will give me more points when it begins to report.

[Anonymous]

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@Anonymous wrote:

Same boat here ....

Had a chargeoff with Discover that was holding 116% utilization. I figured paying it off would give me a huge score jump versus settling. I paid Discover a little over $6300 in full & you know what score increase I got?

...... a whopping 17-25 pts across the bureaus. I wish I would have settled, but at least I get the peace at mind to move along with my life now. I was honestly hoping for a minimum of 40 points added on each bureau. I went from 116% utilized down to zero & got not too much to show for it. Hopefully my new Cap1 card will give me more points when it begins to report.

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You'll recover some more points if you let it increase a little bit - under 10% (on one account only) is ideal. You should also have at least three revolving accounts.

30-50 points is a common spread for UTI% on damaged profiles. On a clean profile it can be upwards of 150 points.

[RobertEG]

While paying in full vs settling for less will not provide score improvement, it will look better in any future manual review of your credit report, so it is beneficial.

It is not all simply about a three-digit number.

When you settle for less, the debt is reported as paid, $0 balance, but they can also include the additional special comment indicating that it was settled for less.

That advises anyone reviewing your credit report that, in the past, you have failed to pay the full debt that you have obligated.

While you settled, the creditor took a net loss in having dealt with you.  If the consumer repeats that prior, demonstrated pattern, then lending to them will result in a loss.

Creditors dont lend with the intent of losing money, to a comment of settled for less is never a favorable comment in a consumer credit report.

[Anonymous]

It's funny because not all CRA's treat this the same way.  One reason I really like Credit Karma (not for scores) is because they give, by far, the best break down of how your score was determined and which accounts are impacting which category.  If another service does this to the level that CK does, I am just not aware of it. I pay for CCT and they don't give any kind of break down of my score other than to tell me I haven't been late in 5 months or whatever. I wish it would tell me the exact accounts it's referring to because I really am not sure since all my baddies are from 2009/2010.  It's "technically" been much longer than 5 months since my  last late payment (more like 6  years) but it's figuring in old accounts somehow.  

Anyway,  CCT shows my EXP utilization at 7%, which is correct with my current accounts.  However, CK shows my TU and EQ  utilization at 97% and 114%, these percentages include 3 CO accounts that have not even updated since 2010.  They are all set to fall off this year so it will change then but, for now, it's having a massive impact on my scores.