Question about how utility is factored on old accounts

[Anonymous]

I have become a bit confussed by something regaurding the calculation of utility.

I had assumed only open/current accounts were being used to calculate utility. However, it seems that this may be in question.

I have an old FP charge off for 399.00 I understand that this is next to impossible to have PFD sucess...and that the paid charge off counts the same is an unpaid charge off. But, in another thread I was reading it seemed to be in question as to if this old charge off was affecting the utility calculations.

So, for my specific old FP charge off....it is reporting on EXPERIAN as:

FIRST PREMIER BANK
Address:  601 S MINNESOTA AVE SIOUX FALLS, SD 57104 (800) 987-5521 Account Number: 517800769630....
Address Identification Number: 0258786552
Status:  Account charged off. $398 written off. $399 past due as of Mar 2013.		Status Details:  This account is scheduled to continue on record until Mar 2016. This item was updated from our processing of your dispute in Oct 2013.
Date Opened: 02/2009 Reported Since: 02/2009 Date of Status: 09/2009 Last Reported: 03/2013	Type: Credit card Terms: NA Monthly Payment: $0 Responsibility: Individual		Credit Limit/Original Amount: $200 High Balance: $399 Recent Balance: $399 as of 03/2013

a PFD would actualy hurt my AAoA ...but if paying it down would help UTILITY....then that might be a good thing!

Thoughts????

[RobertEG]

The reporting of a charge-off is their entry into your file of the statement that, at a prior point, they took a business/accounting measure, determining that you were unlikely to pay the debt.  The reason that subsequent payment or non-payment of the remaining debt does not affect the reporting of the CO is that the fact that they took that action is unrelated to subsequent action on the account.

After a CO, the full debt remains due and collectible by the creditor or debt collector.  It continues as an unpaid balance in the numerator of your % utilization.

Once paid, since the account is closed and thus no longer has either an available credit limit or a balance due, it is no longer scored in your % util.

On the separate issue of AAoA, if you obtain a PFD agreement that extends only to deletion of the reported charge-off, and the creditor does not choose to additionally delete the entire account, it will still be scored under your AAoA.  Thus, a request for a PFD should usually only request deletion of the derogs, not of the entire account.

[Anonymous]

So just to clearify.....what you are saying, is that if I do pay this account down, then it will decrease my utility???

Sorry...I am just wanting to make sure that I am understanding fully what you are telling me.

And thank you for the reply!

[Anonymous]

Since the account is reporting a balance and a CL, yes, it is affecting your utilization.  Once the balance is paid to 0 it will stop being factored in.  The balance will report 0 and the CL will be removed.

It will reduce your overall utilization but at the same time your overall CLs will decrease also.

The CO will impact you still for 7 years.

[Anonymous]

Thank you so much for the clearification!

as it stands, this is a FIRST PREMIER account and as I understand from the forums here...they never PFD so if they stay true to past behaviour...then I can count on the account staying on my credit report until it falls off March of 2016!

I am trying to make the best decision as to if I should focus on paying this one down/off and having it show as a paid CO...or focus my attention and funds on something else that I can get a PFD on. Several factors to consider.

I am looking at this account that would be 399.00 and still remain as a CO....or, working on an old medical collection from Paramount Recovery that would likely agree to a PFD but that one would cost me 700.00 and I do not have the funds to pay it all in a lump sum so i would have to basicly make payments to get it paid off and hope for a PFD.

as far as having one or the other removed from my reports...the FP account is the oldest and the open date is helping my AAoA. it will take a hit if this was removed (though as stated, FP rarely agrees to remove an account early).

The other one wouldnt hurt my AAoA as bad, but would be more difficult to pay off.

Suggestions? thoughts??

Thanks

[jre]

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@Anonymous wrote:

Thank you so much for the clearification!

as it stands, this is a FIRST PREMIER account and as I understand from the forums here...they never PFD so if they stay true to past behaviour...then I can count on the account staying on my credit report until it falls off March of 2016!

I am trying to make the best decision as to if I should focus on paying this one down/off and having it show as a paid CO...or focus my attention and funds on something else that I can get a PFD on. Several factors to consider.

I am looking at this account that would be 399.00 and still remain as a CO....or, working on an old medical collection from Paramount Recovery that would likely agree to a PFD but that one would cost me 700.00 and I do not have the funds to pay it all in a lump sum so i would have to basicly make payments to get it paid off and hope for a PFD.

as far as having one or the other removed from my reports...the FP account is the oldest and the open date is helping my AAoA. it will take a hit if this was removed (though as stated, FP rarely agrees to remove an account early).

The other one wouldnt hurt my AAoA as bad, but would be more difficult to pay off.

Suggestions? thoughts??

Thanks

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Pay the collection if they will remove. First Premier WILL NOT remove I paid in full and it still shows up as a charge-off. If you pay the First Premier you won't gain much by the decrease in utilization. Pay the collection as this affects your score substantially more.

[Anonymous]

A collection and a CO both affect your score substantially.

The difference is,  a CO can affect you in 2 ways, utilization and as a CO.  You may not gain many points by paying it off, that is true.  But the debt will be paid and you no longer need to worry about being sued.  And once a CO, always a CO, paid or not. 

A collection, just getting paid, will not help your score in most instances, unless it is removed.  Collections are not factored into your AAoA.  Only OC accounts.

You could negotiate arrangements with the CA for deleting after the final payment.

FP is not the best to work with for PFDs or GWs but I would not let that keep me from trying if that is what you want.

What is your next oldest account after FP?

[Anonymous]

Hey Thanks for the insight! Much appreciated.

I will have to look back to see what my next oldest account is...but litteraly, I now am down to only 5 derogatories now and all my other accounts are all in good standing but just very new (about 5 months-ish!)

So after this advise, I called to reach out to the medical collection account that is being collected by Paramount Recovery. the collection amount is $645.00

I called the OC (Questcare ER) and after  a lengthy conversation of being told there was nothing they could do unless I PIF with the CA (then they could recall and deleat) but without that, it stayed and collections continued.......the call ended with the lady putting me on hold and coming back to tell me that she wanted to help me out and that the best she could do was to offer me a settlement that had to be paid in one lump sum, within 30 days. It was 50% ($322.50) and if I could get that paid by Jan 30th...they would recall the debt and deleat from all three files. I am pretty happy with that outcome. Now I just have to work hard to get the cash to pay that off ontime!!!!

;-)

[Anonymous]

Nice work!  Congrats.

[Anonymous]

Thanks Guiness56!

My biggest problem now is I have a very VERY low will power when it comes to NOT apping! I keep shooting myself in the foot and I don't know why! I have never been addicted to drugs, cigs, booze or gambling....but the freaking APP has got me in its clutches!!!  Against advisement and my own gut feelings...I apped twice yesterday (already had 19 HP's)....I was trying to just land an extra account to reduce UTIL (yes, I know I was advised against it, and should have known better!).....im feeling SOOOO GUILTY today!!!!

but im getting there. when I started I had 12-ish derogs....and NO possitive trade lines other then defered student loans. Now, I have 20ish possitve trade lines and only 5 degrogs left. Over 100pnts increase in a year-ish! when I get my UTIL down, and another derog off here....and a few more months reporting...im going to be looking good! ;-)

I just gotta stay away from the APPS!!! lol