So after my rebuilding and introduction thread two months back, I took the advice of the many contributors. I've done the Capital One secured and placed myself in their rebuilder bucket (hoping to get out of platinum in two years), secured a Discover IT, and have done some cleaning up on my reports. I settled two charged off accounts with NFCU recently and they have not reported yet (it was very recent so I don't expect it to hit for a month). When they do hit and reflect being paid as agreed/settled, will it help my credit start to go up more? Will it have as high a negative impact that it did? Basically I'm wanting it to show that I've taken charge and have taken responsibility with my finances. Thanks everyone! I too hope to eventually be a contributor here and help people with my journey!
When they report updated status as paid (i.e., no longer delinquent), that will effectively update the total period of delinquency since date of initial delinquency, which will, similar to updated reporting of, for example, 60-late to 90-late, likely result in a temporary negative scoring impact. However, update to paid will then prevent any further extension of the period of delinquency, and thus permit the collection to then begin to age in scoring impact.
Thus, while paying may result in a temporary negative impact, in the longer term, it will preclude further increase in negative scoring effect of the collection.
While not a scoring factor, a significant postive impact is that, upon a manual review, the debt will now show as discharged.
Many applications for new credit, expecially if a detailed manual review is involved, such as the application for a mortgate, will result in denial regardless of score if there is any unpaid, delinquent debt reported as a CO or collection.......
Okay great! I'm waiting for my DiscoverIt card to arrive in the mail it's taken longer than usual because of local weather here. But I'm attacking this head on and that's what I wanted to hear. I don't mind the temporary negative hit. It's a marathon not a sprint. Or how I'm looking at it, 10 hours in the saddle in a weekend stage race descending downhill to the win.
Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that you can handle credit responsibly. If you have open, active credit accounts that are being paid on time and pay all of your bills on time every time, apply for credit only when you actually need it and use credit cards sparingly, maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way you can build good, solid credit, however, it is going to take time.
It's a knife to my heart knowing that you're now dead to NFCU. Is there anything you can do to pay them in full?
They are fabulous to have in your back pocket.