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Paying Off Charge-Off Accounts?

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Anonymous
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Paying Off Charge-Off Accounts?

Thank you all for posting... I enjoy learning about your experiences!

 

I have a couple credit cards (Discover and Capital Bank) that were charged-off about 9-12 months ago.  There is still an outstanding balance on both of these cards.  Does paying off a charged-off account have an impact on your credit score?  If so, what is the impact?

 

Thanks!

Keithai1986

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Anonymous
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Re: Paying Off Charge-Off Accounts?

Yes, because even though the account is closed and charged off, that balance is still contributing to your overall utilization.

Message 2 of 3
Anonymous
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Re: Paying Off Charge-Off Accounts?


@Anonymous wrote:

Thank you all for posting... I enjoy learning about your experiences!

 

I have a couple credit cards (Discover and Capital Bank) that were charged-off about 9-12 months ago.  There is still an outstanding balance on both of these cards.  Does paying off a charged-off account have an impact on your credit score?  If so, what is the impact?

 

Thanks!

Keithai1986


That depends on whether the accounts are updating every month. If they are being updated every month, you should experience a score increase by paying down the accounts. If they are not being updated every month, your score could decrease because paying a charge-off re-ages the negative status of the account. This happened when I started paying my charged-off American Express account. AMEX stopped updating it on March, but when I started paying it in September, my score dropped because the account was re-aged. YEMV, of course. Smiley Happy 

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