Is charge off affecting utilization?

[RobertEG]

You would not reset the exclusion date even if you agreed to a payment plan and then defaulted on the plan.

A new, "first" default on that agreement would have no relevance to DOFD.

DOFD is the date of first delinquency that immediately preceded the collection of charge-off.  The account remains deliinquent even if partial payments are made, and thus would not reset the DOFD. 

Additionally, the DOFD must, by definition in FCRA 605(c), be the date of first delinquency that PRECEDED the charge-off.

You can never, by definintion of DOFD, have a DOFD that governs the exclusion of a charge-off that has a date later than the charge-off.

[Yoshi2015]

Thanks that makes sense! I think I will definitely pay off instead of taking a settlement. 

[Yoshi2015]

Thanks all for sharing your wisdom. I contacted the collection dept with Cap1. They won't do a pfd. They also said it takes 22 days for pymt to post then 30-60 days after that for CRA to update. Is there any way to speed this process up? Also, what is factored in util? Are student loans?

[Yoshi2015]

Oh, if I settle would that not update my util? Is it only if I pif?

[Yoshi2015]

Oh, if I settle would that not update my util? Is it only if I pif?

[Anonymous]

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@Yoshi2015 wrote:

Thanks all for sharing your wisdom. I contacted the collection dept with Cap1. They won't do a pfd. They also said it takes 22 days for pymt to post then 30-60 days after that for CRA to update. Is there any way to speed this process up? Also, what is factored in util? Are student loans?

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Only revolving accounts are included in UTI.

[Anonymous]

I have also done some research on this issue. I have a cap1  acct. that was co in 2010. It is affecting my cc utilization. I have found that if the original creditor doesn't sale or transfer the original debt then they report as a active revolving acct. thus affecting the total utilization. Now the tricky part is that since they are still treating this as a active revolving acct. they must also report the last credit limit amount. Let's say you had a 1000 credit limit before it went delinquent and the new balance after fees, occurred interest etc. and they are now reporting a new balance of 1500 the first 1000 is washed out because of the original credit limit therefore you now have 500 that is being absorbed with your other credit limit acct's. I have noticed that cap1 has been increasing the balance every month since 2010 and every time they do this it takes a hit on my utilization. In my opinion cap1 uses this tactic to keep you in the hole as long as possible. My suggestion if it's under 2-4 year charge off is to try to work on paying it down or off. If it's over 2-4 years old let it ride and let it fall off in 7 years. If you start paying on a charge off acct. it will re-age for 7 more years and charge off its about the worst thing you can have haunting your credit report. Paying it down or off will only help your utilization most of the damage has been done. You can try asking for a pay for delete but, this is unlikely with the original creditor. If you need to let it ride I would just factor that acct. into to your total utilization and keep it under 50% with 30% ideal. Over 50% utilization will really impact your credit score. 31%-49% not as much. but 49% is cutting it a bit close though. keeping under 30% or less you know your safe. 

[Anonymous]

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@Anonymous wrote:

I have also done some research on this issue. I have a cap1  acct. that was co in 2010. It is affecting my cc utilization. I have found that if the original creditor doesn't sale or transfer the original debt then they report as a active revolving acct. thus affecting the total utilization. Now the tricky part is that since they are still treating this as a active revolving acct. they must also report the last credit limit amount. Let's say you had a 1000 credit limit before it went delinquent and the new balance after fees, occurred interest etc. and they are now reporting a new balance of 1500 the first 1000 is washed out because of the original credit limit therefore you now have 500 that is being absorbed with your other credit limit acct's. I have noticed that cap1 has been increasing the balance every month since 2010 and every time they do this it takes a hit on my utilization. In my opinion cap1 uses this tactic to keep you in the hole as long as possible. My suggestion if it's under 2-4 year charge off is to try to work on paying it down or off. If it's over 2-4 years old let it ride and let it fall off in 7 years. If you start paying on a charge off acct. it will re-age for 7 more years and charge off its about the worst thing you can have haunting your credit report. Paying it down or off will only help your utilization most of the damage has been done. You can try asking for a pay for delete but, this is unlikely with the original creditor. If you need to let it ride I would just factor that acct. into to your total utilization and keep it under 50% with 30% ideal. Over 50% utilization will really impact your credit score. 31%-49% not as much. but 49% is cutting it a bit close though. keeping under 30% or less you know your safe. 

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NO. It will not re-age the account. This is a common credit myth. Nothing re-ages the reporting time period of a charge off. NOTHING.