cancel
Showing results for 
Search instead for 
Did you mean: 

Charge-off question

creditrebuilder2021
New Member

Charge-off question

Hi all, thanks in advance for any help.

 

My situation, in brief: I fell behind on payments because I was building a business. I had really optimistic projections for cash flow that didn't work out. Couldn't pay myself from the revenue for about a year. All is good now, though (except my credit) and I have been able to accumulate a lot of cash. My income is very high - the bet worked out. I want to figure out how to best use this cash to improve my scores, and especially my mortgage score.

 

FICO Mortgage Scores: EX 587, EQ 610, TU 615

 

I have a charge-off that is reporting monthly with a balance of $12K (from Goldman Sachs) - it's from Oct 2019. How badly is this hurting my mortgage score? What is your estimate of the score increase if I pay in full?

 

I also have AMEX accounts that were settled, with about $5K remaining across 3 cards. Showing as legally settled for less than the full amount. Any advice on what to do with those?

 

Thank you!

7 REPLIES 7
Birdman7
Super Contributor

Re: Charge-off question


@creditrebuilder2021 wrote:

Hi all, thanks in advance for any help.

 

My situation, in brief: I fell behind on payments because I was building a business. I had really optimistic projections for cash flow that didn't work out. Couldn't pay myself from the revenue for about a year. All is good now, though (except my credit) and I have been able to accumulate a lot of cash. My income is very high - the bet worked out. I want to figure out how to best use this cash to improve my scores, and especially my mortgage score.

 

FICO Mortgage Scores: EX 587, EQ 610, TU 615

 

I have a charge-off that is reporting monthly with a balance of $12K (from Goldman Sachs) - it's from Oct 2019. How badly is this hurting my mortgage score? What is your estimate of the score increase if I pay in full?

 

I also have AMEX accounts that were settled, with about $5K remaining across 3 cards. Showing as legally settled for less than the full amount. Any advice on what to do with those?

 

Thank you!


@creditrebuilder2021 Pay off that Goldman Sachs as soon as you can, it is continually suppressing your scores every update. It doesn't matter whether it's settled for less, long as it is a zero balance.

-Scoring wisdom: General Scoring Primer, Payment History, Amount of Debt, Length of History/New Credit, Mix/Disputes/Freezes/Searches, Mortgage Scores/Negative Reason Codes/V.9, Helpful Links,
CassieCard’s Reason Statements Thread,
iv's friendly statement to reason statement concordance,

ccquest’s Workbook to calculate metrics.
Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.




(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 2 of 8
creditrebuilder2021
New Member

Re: Charge-off question

Got it, will do. What should I do for the AMEX cards? They're showing as zero balance and last updated 1/20. Is it not worth to pay off given that it'll trigger an update?


@Birdman7 wrote:

@creditrebuilder2021 wrote:

Hi all, thanks in advance for any help.

 

My situation, in brief: I fell behind on payments because I was building a business. I had really optimistic projections for cash flow that didn't work out. Couldn't pay myself from the revenue for about a year. All is good now, though (except my credit) and I have been able to accumulate a lot of cash. My income is very high - the bet worked out. I want to figure out how to best use this cash to improve my scores, and especially my mortgage score.

 

FICO Mortgage Scores: EX 587, EQ 610, TU 615

 

I have a charge-off that is reporting monthly with a balance of $12K (from Goldman Sachs) - it's from Oct 2019. How badly is this hurting my mortgage score? What is your estimate of the score increase if I pay in full?

 

I also have AMEX accounts that were settled, with about $5K remaining across 3 cards. Showing as legally settled for less than the full amount. Any advice on what to do with those?

 

Thank you!


@creditrebuilder2021 Pay off that Goldman Sachs as soon as you can, it is continually suppressing your scores every update. It doesn't matter whether it's settled for less, long as it is a zero balance.


 

Message 3 of 8
OmarGB9
Community Leader
Super Contributor

Re: Charge-off question

I'm not sure I understand about the Amex cards. You said they were settled, but there is $5k remaining across 3 cards? What does that mean? If you settled all of them for less, the balance should be zero on all of them.


Last App: 04/05/2021
Penfed Signature Loan

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 4 of 8
Birdman7
Super Contributor

Re: Charge-off question


@creditrebuilder2021 wrote:

Got it, will do. What should I do for the AMEX cards? They're showing as zero balance and last updated 1/20. Is it not worth to pay off given that it'll trigger an update?


@Birdman7 wrote:

@creditrebuilder2021 wrote:

Hi all, thanks in advance for any help.

 

My situation, in brief: I fell behind on payments because I was building a business. I had really optimistic projections for cash flow that didn't work out. Couldn't pay myself from the revenue for about a year. All is good now, though (except my credit) and I have been able to accumulate a lot of cash. My income is very high - the bet worked out. I want to figure out how to best use this cash to improve my scores, and especially my mortgage score.

 

FICO Mortgage Scores: EX 587, EQ 610, TU 615

 

I have a charge-off that is reporting monthly with a balance of $12K (from Goldman Sachs) - it's from Oct 2019. How badly is this hurting my mortgage score? What is your estimate of the score increase if I pay in full?

 

I also have AMEX accounts that were settled, with about $5K remaining across 3 cards. Showing as legally settled for less than the full amount. Any advice on what to do with those?

 

Thank you!


@creditrebuilder2021 Pay off that Goldman Sachs as soon as you can, it is continually suppressing your scores every update. It doesn't matter whether it's settled for less, long as it is a zero balance.


 


@creditrebuilder2021 you already settled those, so the balance should be zero and there's nothing more you can do but wait them out. they should not update anymore because they are paid to zero. 

-Scoring wisdom: General Scoring Primer, Payment History, Amount of Debt, Length of History/New Credit, Mix/Disputes/Freezes/Searches, Mortgage Scores/Negative Reason Codes/V.9, Helpful Links,
CassieCard’s Reason Statements Thread,
iv's friendly statement to reason statement concordance,

ccquest’s Workbook to calculate metrics.
Clean/Thick/Mature/No New Revolver - 8,9; Clean/Thick/Mature/No New Account - 5/4/2.
Correct Ag.Util. under 5% all times. (Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.




(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 5 of 8
creditrebuilder2021
New Member

Re: Charge-off question


@OmarGB9 wrote:

I'm not sure I understand about the Amex cards. You said they were settled, but there is $5k remaining across 3 cards? What does that mean? If you settled all of them for less, the balance should be zero on all of them.


$0 balance on credit report, but balances shown in the AMEX portal, given that there was a settlement, not full pay-off. 

Message 6 of 8
Brian_Earl_Spilner
Community Leader
Mega Contributor

Re: Charge-off question

The only reason to pay them off is to be able to get an amex card again anytime soon.




Message 7 of 8
OmarGB9
Community Leader
Super Contributor

Re: Charge-off question


@creditrebuilder2021 wrote:

@OmarGB9 wrote:

I'm not sure I understand about the Amex cards. You said they were settled, but there is $5k remaining across 3 cards? What does that mean? If you settled all of them for less, the balance should be zero on all of them.


$0 balance on credit report, but balances shown in the AMEX portal, given that there was a settlement, not full pay-off. 


Ah, got it. In that case, paying that remaining $5k will do you no good score-wise. That'll only help you if you wish to get back in with them down the road.

 

If you have no other derogatory accounts on your reports, then I'm afraid all you can do is pay the Goldman Sachs account so it stops updating monthly and the utilization hit from the CO will be gone. Was that a credit card or an installment loan? If it was a credit card, the utilization hit will be removed upon payment in full/settlement, and you should see some points back. How much is impossible to say. Beyond that, you just need time to let the negatives age.


Last App: 04/05/2021
Penfed Signature Loan

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 8 of 8
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.