Last charge off

[Anonymous]

I paid all my collections off and they have been deleted except one I'm just waiting for. I had two charge offs and paid one off. I'm trying to get a mortgage soon and since my last myFICO report all were still on there. My myFICO 8 scores are 620-630's now but I don't know my updated scores on my mortgage score. My question is.... do I pay the last charge off? Will it significantly boost my score if that showed paid and the last collection is removed? Can I get approved with it on my credit report? It doesn't get removed on its own until 2024

[tropolis]

I don't believe in paying those unless you get a pay for delete.

[OmarGB9]

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@Anonymous wrote:

I paid all my collections off and they have been deleted except one I'm just waiting for. I had two charge offs and paid one off. I'm trying to get a mortgage soon and since my last myFICO report all were still on there. My myFICO 8 scores are 620-630's now but I don't know my updated scores on my mortgage score. My question is.... do I pay the last charge off? Will it significantly boost my score if that showed paid and the last collection is removed? Can I get approved with it on my credit report? It doesn't get removed on its own until 2024

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It depends. Is that last CO a credit card, and is it updating monthly? If yes to both questions, then I'd venture to guess that yes, you should see a pretty significant boost in scores. Especially once the last collection comes off.

As for getting approved for a mortgage

with the CO unpaid, it depends on your lender. Some will, some won't.

[tropolis]

What were your 3 starter cards when you began the rebuild from ground zero in April 19?

[OmarGB9]

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@tropolis wrote:

I don't believe in paying those unless you get a pay for delete.

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That's not always possible though. And sometimes it still benefits you to pay even if it doesn't get deleted; for example: in the case of a credit card charge off that's updating monthly and has a fairly high balance. In that case, for most profiles, it should lead to a score boost because of the utilization hit from the CO counting as a maxed card will go away, and the monthly updates will stop.

[CyberChick]

With the new overlays due to COVID, many lenders are requiring paid charge-offs.

[Anonymous]

My starter cards were First Premier, Capital One Platinum and Credit One. I think I will pay it to be on the safe side. It updates monthly and it's a high balance but they offered me less than 50% settlement. Then I will be done and not have to look back or take a risk not getting my mortgage because it's on there.

[House2021]

It really depends on what the balance is and how much available open credit you have. For example, I had a 8400 CO, I had a 5900 credit limit, with my other COs, my utilization went to 74% from 84%. I gained 19 mortgage points. I paid off a second $8000 card and it only raised my mortgage score 5 points. 

[Anonymous]

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@Anonymous wrote:

My starter cards were First Premier, Capital One Platinum and Credit One. I think I will pay it to be on the safe side. It updates monthly and it's a high balance but they offered me less than 50% settlement. Then I will be done and not have to look back or take a risk not getting my mortgage because it's on there.

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Not to mention, you eliminate the chance of getting sued, especially once they see mortgage pulls on your reports and decide to go for the jugular, knowing you'll have to pay then, and likely for the full amount. I agree with paying it for that and the reasons above.

[8in2years]

I would pay off any charge offs, not sure if that will generate a score increase though.