Charge offs factor into credit utilization?

[House2021]

Are charge off accounts factored into credit utilization? If I pay off all my charge offs (settle less than owed) will it give a decent score increase? I will still have collections on there after paying the charge offs. For those that settled charge offs (can't be deleted), how much did your scores improve? 

[OmarGB9]

Yes, even though front end credit monitoring dashboards may not show it. In the background though, it's being factored into your score. As far as score increases you could potentially see, with collections still showing, they'll probably be minimal. It's hard to say though.

[House2021]

What if it's a big charge-off amount?

[Jnbmom]

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@House2021 wrote:

What if it's a big charge-off amount?

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If you still have a collection showing, as stated it will be a minimal gain...............................

[refereeguy1390]

I have a question too on this topic.  I'm assuming the credit limit of the charge off card does not get included in the utilization calc?  That would make the most sense, but I couldn't find an answer.

[House2021]

What if I paid off the collections? If I have charge offs paid to $0 balance with late payments, isn't that still a dirty score card or would that get me rebucketed?

[Anonymous]

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@Jnbmom wrote:

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@House2021 wrote:

What if it's a big charge-off amount?

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If you still have a collection showing, as stated it will be a minimal gain...............................

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Agreed. The utilization drop will help but in the grand scheme of adverse scoring factors, a CO is up near a BK. Its weight on your scores would exceed that of utilization, so the effect of lowering utilization will be overshadowed by the existence of the CO on the report.

[simplegirl]

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@House2021 wrote:

What if I paid off the collections? If I have charge offs paid to $0 balance with late payments, isn't that still a dirty score card or would that get me rebucketed?

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The collections would have to be removed to be rebucketed. Paying stuff off doesn't change the scorecard because everything you paid off is still present.

[OmarGB9]

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@House2021 wrote:

What if I paid off the collections? If I have charge offs paid to $0 balance with late payments, isn't that still a dirty score card or would that get me rebucketed?

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Still would not help much unless you got the collections completely removed. A paid collection looks better than an unpaid one, but scoring wise it doesn't help much. And yes, having a CO puts you in a dirty scorecard, but when collections are still present, you're on a "public record" scorecard which is an even lower tier dirty scorecard. It gives you a ceiling you can't really get past until ALL collections are removed.

[House2021]

Do you know what type of ceiling that would be? What a score would max out at? Is it better to payoffall my charge offs or all my collections? Right now I can only do one or the other,each category is about $4000 each (amount I think I could settle for)