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Paying off Charge-off's which is best?

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Paying off Charge-off's which is best?

I've read multiple boards on this topic and have seen that it is very much based on whom the credit card issuer is. So here is my specific case:

 

I ran into some trouble shortly after the hurricane in Puerto Rico. Then, of course, no power or water for months only made situations worse. The Island is still in recovery. I am desperately trying to recover and with that my finances. I now have payment plans with both Discover and Chase - both credit cards were in charge off, closed by creditor. This hurt my credit SEVERELY and is in the low 500's. I've now been 1 year with good payments with all my accounts and now trying to salvage or pay my past debt like these two credit cards. 

 

My question is, I already have payment agreements with them, but in order to increase my credit score and credit worthyness, is it best to settle (though I cannot afford to pay a lump sum), continue to pay, pay for delete, or other? I live in Puerto Rico, can't exactly find the statue of limitation laws here.

 

What is best to help my score? I have been paying ontime for nearly a year and have not seen any increase in my FICO score?

 

Please help! 

Starting Score: EQ 601 | TU 614 | EX 596
Current Score: EQ 601 | TU 614 | EX 596
Goal Score: 780


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Re: Paying off Charge-off's which is best?


@financialfreedom777 wrote:

I've read multiple boards on this topic and have seen that it is very much based on whom the credit card issuer is. So here is my specific case:

 

I ran into some trouble shortly after the hurricane in Puerto Rico. Then, of course, no power or water for months only made situations worse. The Island is still in recovery. I am desperately trying to recover and with that my finances. I now have payment plans with both Discover and Chase - both credit cards were in charge off, closed by creditor. This hurt my credit SEVERELY and is in the low 500's. I've now been 1 year with good payments with all my accounts and now trying to salvage or pay my past debt like these two credit cards. 

 

My question is, I already have payment agreements with them, but in order to increase my credit score and credit worthyness, is it best to settle (though I cannot afford to pay a lump sum), continue to pay, pay for delete, or other? I live in Puerto Rico, can't exactly find the statue of limitation laws here.

 

What is best to help my score? I have been paying ontime for nearly a year and have not seen any increase in my FICO score?

 

Please help! 


What other debts might you have (open)?

 

A settlement if you do not have the funds will most likely not be a prioritydue to funds availability. Also often they would report as settled, with the remaining balance ex. debt $5k, settled for $2500, they would report the difference of $2500. They would not be able to sue you, but still harms your credit for several years. Possible 1099 form for the settlement difference as income.

 

Pay for deletes are your best options, in house collection on CCs can be difficult more than a collection agency. However, it usually requires the full amount to be paid, plus interest. This is most likely not an option for you at this time.

 

Your scores I'm guessing are more likely related that the two accounts are closed with balances, so if you owe $1000 or $1, both accounts are being considered as 100% maxxed out utilization. Once they are paid in full, monthly, etc. It will reduce the high utilization percentage a great deal.

 

If you have other open credit, please list accounts with credit limits and current balances. List any derogs you might have, collections, late payments and the date on those. Do you have any installment loan in the credit mix, car, mortgage, student loan, personal loan?

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