Charge-off question

[Anonymous]

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!

[Anonymous]

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@Anonymous 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!

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@Anonymous 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.

[Anonymous]

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?

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@Anonymous wrote:

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@Anonymous 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!

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@Anonymous 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.

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[OmarGB9]

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.

[Anonymous]

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@Anonymous 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?

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@Anonymous wrote:

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@Anonymous 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!

---

@Anonymous 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.

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@Anonymous 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. 

[Anonymous]

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@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.

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

[Brian_Earl_Spilner]

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

[OmarGB9]

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@Anonymous wrote:

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@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.

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

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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.