So basically the short of it is your score most likely tanked because the Original Creditor had not updated the payment history to reflect all of the late payments. Payment history makes up 35% of your credit score, the more recent, frequent, and more serious the delinquentcy classification (30, 60,90-120+days) the harder they hurt. Since you PiF, they have to update it, so all those lates now reflecting are hurting you.
Now here is the good news.
1.) Eventually wether it was the OC or a CA, it would have been updated anyway and it still would have hurt you, but now, since it's paid, as time goes on it will hurt less.
2.) If you ligitimately owed the money, you did the right thing by paying it. I honestly believe that without an attitude of commitment to pay what you owe, one is not likely to succeed in credit building.
3.) Being paid it will look better than unpaid to second chance lenders, and as the delinquentcies age off the negative payment history affect will lessen and your utilization won't be trashed.
4.) Other creditors may have updated your charge offs more recently and thus they may not hurt as badly.
Generally speaking, the sooner you take action the better for your credit. If your late, don't be 30 days late, if your 30 or 60 days late, don't be 90 or 120. If your 120, don't be 180 etc... This is my opinion and it is assuming the debt is ligitimate. If it's not, I think in most cases payment with no recourse is not a good option. But I am no expert on credit repair.
Now here is the good news.
1.) Eventually wether it was the OC or a CA, it would have been updated anyway and it still would have hurt you, but now, since it's paid, as time goes on it will hurt less.
2.) If you ligitimately owed the money, you did the right thing by paying it. I honestly believe that without an attitude of commitment to pay what you owe, one is not likely to succeed in credit building.
3.) Being paid it will look better than unpaid to second chance lenders, and as the delinquentcies age off the negative payment history affect will lessen and your utilization won't be trashed.
4.) Other creditors may have updated your charge offs more recently and thus they may not hurt as badly.
Generally speaking, the sooner you take action the better for your credit. If your late, don't be 30 days late, if your 30 or 60 days late, don't be 90 or 120. If your 120, don't be 180 etc... This is my opinion and it is assuming the debt is ligitimate. If it's not, I think in most cases payment with no recourse is not a good option. But I am no expert on credit repair.
Starting Score: EQ:791 | TU:785 | EX:781
@Anonymous wrote:I'm in a similiar situation, where I'm trying to boost my score in the short term, with goal of overall better financial health. Is there a way to know in advance if paying charge offs will do this to your score? If it will, I may wait to pay off and just try to get my utilization down since i can't take the hit in the next 2-3 months.
When was the last time it was updated? If it's updated every month already, then paying it off should not cause a drop. If it hasn't updated for a while, then it will likely cause a drop.
If it is updating each month then its already hitting you fresh every time it updates. So, getting that paid so it stops reporting will start to help your scores start to improve sooner.
