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Charge Off Account

Bougieboy
New Member

Charge Off Account

Hello,

My youngest daughter applied and received a store credit card end of 2019.  She was under the impression it was 6 months no payments and when she realized her mistake, COVID hit.   She paid this account off in September 2020 and it is showing as a paid charge-off on her credit.   She has 1 open credit card account with her bank and two paid off car loans all paid timely with the most recent car loan paid off in July 2020.  She has no other derog items.  Unfortunately, this charge off has tanked her credit score.   She wrote to the creditor asking if they would remove the derog; but, they wouldn't.  Any suggestions on what she needs to do to increase her credit score?  She is looking to buy a house in the future and wants to build her score back up.   TIA

Message 1 of 7
6 REPLIES 6
mycreditscoreblows
New Visitor

Re: Charge Off Account

If the original creditor isn't willing to make any goodwill adjustments, then all she can really do is let the bad account age and focus on developing a better credit profile. It sounds like her credit reports is pretty thin, if she only has one card and presumably no loans reporting every month. If that's the case, I would look into adding two more revolving credit accounts and some sort of loan; potentially a secured loan through the bank or a service like Self.

Message 2 of 7
Brian_Earl_Spilner
Community Leader
Mega Contributor

Re: Charge Off Account

Unfortunately, the only thing worse than a charge off is a bankruptcy. It will basically hold its strength the entire 7 years. Good news is since it's paid, it won't update so it won't keep her scores down. They'll go up over time. I suggest you look up the Goodwill saturation technique to try to have the derogatory removed, but original creditors are not known to remove anything. Still, it won't hurt to try.




Message 3 of 7
Nikita2008
Contributor

Re: Charge Off Account

I have a charge off on my credit from 2019 as well. There is little to no chance of getting them to remove it. I think as far as that goes she's done the only thing she can do, pay it so it stops updating.

 

With a charge off , I've still managed to get my score up in the 700's. Ideally 3 open credit cards and an installment loan will give you a decent mix of credit to help build out the file. Since the cars are paid off she won't get it from that.

 

As for credit cards:


I would look for 2 more credit cards. I would try to avoid fee heavy builder cards like First Premeir,   Credit One, First Access and those types unless absolute last resort. Capital One might be a good starting point for her, they may give her an unsecured card. All told If necessary go for a secured card with a reputable issuer over a fee heavy card. Capital One, Citi, Discover, and BOA all offer secured cards, even better if she is eligible to join NFCU or PenFed, these cards can all graduate and she can have a solid future with those issuers. Many local credit unions have similar offerings.

 

For the loan Is get a secured savings loan from a credit union.

 

No lates or slip ups going forward. Good luck.

Message 4 of 7
sjt
Senior Contributor

Re: Charge Off Account

Who is the creditor that the store card is with?
American Express: Platinum Charge, Optima, Business Gold, Delta Business Platinum, Business Cash
Barclays: Arrival+ WEMC
Capital One: Savor WEMC, Venture VS
Chase: Freedom U VS, CSR VI
Citibank: AAdvantage Platinum WEMC
Elan/US Bank: Fidelity VS
Credit Union: Rewards Visa
FICO 08: (3.04.21) EX: 838 / EQ: 850 / TU: 848
Message 5 of 7
Bougieboy
New Member

Re: Charge Off Account

Citibank

Message 6 of 7
sjt
Senior Contributor

Re: Charge Off Account


@Bougieboy wrote:

Citibank

 


 I would write a goodwill letter to the executive office. The question that may need to be addressed is why didn't she read her monthly statement?

American Express: Platinum Charge, Optima, Business Gold, Delta Business Platinum, Business Cash
Barclays: Arrival+ WEMC
Capital One: Savor WEMC, Venture VS
Chase: Freedom U VS, CSR VI
Citibank: AAdvantage Platinum WEMC
Elan/US Bank: Fidelity VS
Credit Union: Rewards Visa
FICO 08: (3.04.21) EX: 838 / EQ: 850 / TU: 848
Message 7 of 7
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