How to Address Charge-Off and Collections affecting Utilization and Score?

[Anonymous]

I am trying to help my bf repair his credit. After getting all open accounts current and paid on time there is one issue. He has 1 collection account that I believe is having a large effect  on his fico (in addition to the late payments that only time can help). 

The general profile looks as follows. 

2 car loans paid off 4-6 years ago. 

2 student loans - open/current but some past lates

1 open credit card Limit 1K, 50% utilization (this will be down to 20% utilization in April) - no lates

1 credit one charge off 800 limit - Charged off in 2015 and sold to LNVN for 1200

LNVN is reporting every month as a collections for the amound of $1200. (started reporting in February 2016). 

No other collections, No judgements/liens etc. 

How is this affecting his utlization? How will settling vs making the full payment affect utilization? I generally opt to just PFD, but considering regardless that the charge off will be on his credit until 2022  - Im not sure if this is the best course of action. 

Do you think there will be a significant increase considering he has no other collections ? I believe with on time payments he can have great credit once we get this cleared up. 

[Anonymous]

I just settled a collection from FCO from 2011. In the process of getting a mortgage, so lender said I had to take care of it. 

Account was reporting every month, so it was definitely weighing my score down. Once I settled it, I got notification from Transunion 2 days letter that I had a score increase of 24 points. 

I've seen others on these forums that whenever you have the last collection/charge-off removed you are guaranteed to have a huge score increase. 

[Anonymous]

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@Anonymous wrote:

I am trying to help my bf repair his credit. After getting all open accounts current and paid on time there is one issue. He has 1 collection account that I believe is having a large effect  on his fico (in addition to the late payments that only time can help). 

The general profile looks as follows. 

2 car loans paid off 4-6 years ago. 

2 student loans - open/current but some past lates

1 open credit card Limit 1K, 50% utilization (this will be down to 20% utilization in April) - no lates

1 credit one charge off 800 limit - Charged off in 2015 and sold to LNVN for 1200

LNVN is reporting every month as a collections for the amound of $1200. (started reporting in February 2016). 

No other collections, No judgements/liens etc. 

How is this affecting his utlization? How will settling vs making the full payment affect utilization? I generally opt to just PFD, but considering regardless that the charge off will be on his credit until 2022  - Im not sure if this is the best course of action. 

Do you think there will be a significant increase considering he has no other collections ? I believe with on time payments he can have great credit once we get this cleared up. 

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The CO and collection are definitely hurting his your scores and to some degree depending on how recent, the lates from his student loan.  Has LVNV offered to settle?  I would be concerned since you're still within the SOL.  If he could settle it, then it give your profile a chance to report more positive payment history from the accounts he  does have current.  Credit One did a GW deletion on my reports, but I had already paid off the collection with Midland.  Regardless, he needs to take care of the collection whether they do a PFD or not cause it's still updating.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

I am trying to help my bf repair his credit. After getting all open accounts current and paid on time there is one issue. He has 1 collection account that I believe is having a large effect  on his fico (in addition to the late payments that only time can help). 

The general profile looks as follows. 

2 car loans paid off 4-6 years ago. 

2 student loans - open/current but some past lates

1 open credit card Limit 1K, 50% utilization (this will be down to 20% utilization in April) - no lates

1 credit one charge off 800 limit - Charged off in 2015 and sold to LNVN for 1200

LNVN is reporting every month as a collections for the amound of $1200. (started reporting in February 2016). 

No other collections, No judgements/liens etc. 

How is this affecting his utlization? How will settling vs making the full payment affect utilization? I generally opt to just PFD, but considering regardless that the charge off will be on his credit until 2022  - Im not sure if this is the best course of action. 

Do you think there will be a significant increase considering he has no other collections ? I believe with on time payments he can have great credit once we get this cleared up. 

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The CO and collection are definitely hurting his your scores and to some degree depending on how recent, the lates from his student loan.  Has LVNV offered to settle?  I would be concerned since you're still within the SOL.  If he could settle it, then it give your profile a chance to report more positive payment history from the accounts he  does have current.  Credit One did a GW deletion on my reports, but I had already paid off the collection with Midland.  Regardless, he needs to take care of the collection whether they do a PFD or not cause it's still updating.

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Thanks KayKay, 

Your response cleared up a lot. I have to follow up and find out if LNVN provided him any offers to settle. If so that will be the route will we take for positive reporting.  I am curious did Credit One delete their entire history or did they delete the late payments?

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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@Anonymous wrote:

I am trying to help my bf repair his credit. After getting all open accounts current and paid on time there is one issue. He has 1 collection account that I believe is having a large effect  on his fico (in addition to the late payments that only time can help). 

The general profile looks as follows. 

2 car loans paid off 4-6 years ago. 

2 student loans - open/current but some past lates

1 open credit card Limit 1K, 50% utilization (this will be down to 20% utilization in April) - no lates

1 credit one charge off 800 limit - Charged off in 2015 and sold to LNVN for 1200

LNVN is reporting every month as a collections for the amound of $1200. (started reporting in February 2016). 

No other collections, No judgements/liens etc. 

How is this affecting his utlization? How will settling vs making the full payment affect utilization? I generally opt to just PFD, but considering regardless that the charge off will be on his credit until 2022  - Im not sure if this is the best course of action. 

Do you think there will be a significant increase considering he has no other collections ? I believe with on time payments he can have great credit once we get this cleared up. 

---

The CO and collection are definitely hurting his your scores and to some degree depending on how recent, the lates from his student loan.  Has LVNV offered to settle?  I would be concerned since you're still within the SOL.  If he could settle it, then it give your profile a chance to report more positive payment history from the accounts he  does have current.  Credit One did a GW deletion on my reports, but I had already paid off the collection with Midland.  Regardless, he needs to take care of the collection whether they do a PFD or not cause it's still updating.

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Thanks KayKay, 

Your response cleared up a lot. I have to follow up and find out if LNVN provided him any offers to settle. If so that will be the route will we take for positive reporting.  I am curious did Credit One delete their entire history or did they delete the late payments?

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It was a CO, so they deleted the whole tradeline.  Midland was the CA and they deleted the tradeline too.  IDK about LVNV, but I've not heard good things about them.  Unfortunately for him, Credit One and LVNV are owned by the same financial group, so that could make a PFD harder.