Credit Acceptance Charge Off with Settlement Offer

[Cass2387]

Hello all! 
Im here just looking for advice or solutions to a problem with a charge off. I had an auto loan with Credit Acceptance Corporation charge off back in June of 2016 and  DOFD on my credit report shows May of 2015. They reported it as a collection/CO from May of 2016 until March of 2020 where the began reporting it as 180 days late every month. It falls off June 2022. They offered me a settlement for 20% of the pst due amount which is 6124.87. The past due amount shows 30624.36. My wife wants a mortgage this year and this is the only baddie holding me back. Should I pay it off or can I get approved with this on my credit report?

EQ 608

TRS 600

EX 607

[mycreditscoreisfair]

It will likely be difficult to obtain a mortgage with a traditional lender with this still unresolved. Depending on what type of mortgage you're looking for, it could be difficult to get one with a score in the low 600s as well. 

If this is going to fall off in June 2022, then is it worth paying $6k to potentially get a mortgage 6-7 month sooner? That's up to you and your wife. 

I'd at least talk to a mortgage lender and see if it's worth it to pay it or wait it out.

[Cass2387]

Thank you for the reply. We'll discuss it one a  lender. I just don't want to burn inquiries unnecessarily. 

[SMB85]

I'd settle ASAP. Just went through a mortgage with several old COs. I ended up settling all but one before going to underwriting, but I can tell you any CO reporting a balance absolutely crushes your scores. My lender was able to run scenarios in their simulator and by paying off all of the CO balances my scores would have gone up almost 100 points. Not that you'd have similar results -- depends what else is on your report -- but find a good lender or broker who can walk you through score improvement and find the right mortgage product for you.

[Cass2387]

Thank you. I paid them off today. I have no other baddies on my report. I hope I can find a good person to work with here in Baton Rouge!