Old Charge off.

[Anonymous]

I am in the process of looking to buy a house.  I am on the cusp of being able to qualify for a VA mortgage.  Mid score of 605.  I have been working on my credit for about a year now, and went from the high 400's to now around 605.   I am going to list my accounts that are in collections or chargeoffs, and could someone help me figure out what to pay off or not to get over the hump?  I will also include some info that my loan "credit" program said about them.

1.  Good standing currently open.

GM Financial - 100% on time bal ~29000 (Can't do anything with this)

Cap One CC - 20/300 100% on time

Cap One CC - 29/335 100% on time

Discover CC - 360/1250  100% on time

Will be paying down both Cap one cards to 0 and Discover to around 50 very shortly.  MyFICO says that will get me a few points(~5).

2  Negative Items

3 Medical collections 

1914

717

2385

3 Collections

546 wont do pay for delete DoFD: 10/2014

192 Havent talked to them DoFD: 06/2014

168 Havent talked to them DoFD: 07/2013

Charge off

1372  Won't pay for delete DoFD: 11/2012

0(showing 0 bal) Havent talked to them DoFD: 10/2010

0(showing 0 bal) Havent talked to them DoFD: 10/2010

3421 Wont pay for delete DoFD 11/2010

Now with the lender credit program, they said to get me over the hump to pay off the 3421 charge off.  Should raise my scores by like ~30.  But I am worried about reaging that account.  Would it be better to let it drop off by the end of the year, or settle and pay it off and have it reage?  Anything else that I can take care of to get my scores up?  I have about $2500 to put towards these debts.  I asked about getting some of the smaller accounts or the $717 medical collection, and they siad it would not affect the score.  Anyone with any help would be appreciated.

[RobertEG]

If your concern regarding reaging is that it will extend the period for exclusion of the reported charge-off, the exclusion period for either a collection or charge-off is unaffected by whether the debt is paid or unpaid.  The exclusion period is a date-certain that is no later than 7 years plus 180 days from the date of your first delinquency on the OC account, after which the debt remained delinquent until the creditor did the charge-off.

If the creditor is showing a $0 balance after the charge-off and you did not pay the debt, that means the creditor has reported that they no longer own the debt.

The OC thus can no longer accept any payment, and a renewed PFD would no longer be possible

The new owner can report a collection at any time.

Have you been contacted by a debt collector regarding the charged-off account that is now reporting a $0 debt balance?

If you have the name of the new owner, you can contact them with a pay for not reporting offer, thus preventing further damage.

Removal of the reported charge-off would be limited only to a GW request of the original creditor.  Having taken a loss on the debt, a GW from the OC might be tough to obtain, particularly if they were previously unwilling to do a PFD when they had money on the table......

[Anonymous]

So is it possible to pay the chargeoff of 3421?  It is still reporting a balance on my CR and is the OC.  So if they charged it off and it still shows a balance, does that mean they still own the debt?  

Also the $0 chargeoffs, all I can do with those is just wait the 7+180?  I have not been contacted by any debt collector in over a year.  

[Anonymous]

Also where I typed DOA above I meant DoFD

[RobertEG]

It is likely that they still own the debt if they are still reporting a balance, but it is not conclusive.

While they are required under FCRA 623(a)(2) to "promptly" update their reporting to show $0 balance after sale of the debt, they may be negligent in that updating, or may have sold it in the past few days.

Reporting of a $0 balance means they affirmatively stated that they no longer own the debt.

Lack of updating is not an affirmative reporting, so is not conclusive.  If in doubt, call them and ask.....

[Anonymous]

So one last question about the charge off.  If I work out a settlement and pay, say 1/2 to show the account as settled on the CR it will still age off towards the end of the year?

[RobertEG]

Payment, partial payment, or nonpayment are all immaterial to credit report exclusion of a collection or charge-off.

Exclusion is based ONLY on the reported DOFD, and can be no later than 7 years plus 180 days from the DOFD.

However, as noted by others, the CRA will likely exclude at approx 7 years.

The exact exclusion date is up to the discretion of the CRA, provided they do it no later than the max statutory date.