Rebuilding credit but need help answering questions

[User470766]

I destroyed my credit several years ago due to overwhelming circumstances. I have a decent knowledge on credit but the more I read the more I get confused. I gave up on everything and got in to bad situation ( 21K ) debt and let everything so. For the past two years I have managed to get 4 credit cards and everything is current and in good standing. I was using another service for monitoring my credit but I gave up due to very weird outcomes and now I'm subscribed to myFICO. So when I got my 3BR report I was surprised because I noticed many differences. It says that I have 9 accounts open and my debt is 9.5K but only 4 are open and I only have 1.9K in debt. All of the other accounts are older than 3-4 years and they were closed by granter and charged off. my questions are the following : 

Do I dispute all of those accounts 5-6 and state they are closed ?

If I manage to have them closed this would lower my debt from $9500 to $1900, however my overall credit age would drop from like 4 years to 2 years ... What is better ?

I'm trying to purchase a house in a year and I'm wondering is these reported debts will affect my debt to income ration ?? 

I would like to mention that none of these accounts are in collection, they are being reported as open yet the account is closed and the debt was charged off. Is this a mistake or is it comon ?  

I would like to thank all of you ahead of time for taking the time to acknowledge my case and contribute to helping. 

[RobertEG]

The status of an account as open or closed has nothing to do with the debt owed.

It only relates to whether the account remains open to regular use.

Open actually only has practical meaning with respect to revolving accounts, as it closes the ability of the consumer to continue to charge, and thus increase debt.

Installment accounts dont normally have any ability of the consumer to increase the debt principal, and "closing" the account has little practical meaning.

An account that is charged-off is, by definition, seriously delinquent.  Creditors have almost certainly closed such accounts to further use by the consumer, regardless of whethr they have reported the account as closed.  Attempts, for example, to use a credit card that has been charged-off will almost certainly result in declination of the attempted charge.  Yes, you can dispute and have it updated to report closed, but it does not negate the debt or end ability to continue to report deliquencies, refer for collection, or bring civil action.

[User470766]

Thank you for you response. My surprise is that in any other credit service like Creditkarma my available credit, total debt and available balance are from my actual open accounts. I have 2700 in total credit line and 1900 are in use. However in myFICO is appears that's all  old closed accounts that were charged off with balances are part of my total debt. My question is that if I dispute these 5 accounts to indicate closed, myFICO would only show that I have a debt of 1900 and not 9500. Is this correct ? 

This would have to make a big difference when trying to get a mortgage a year from now as my DTI would be much lower if not 0 debt when I pay off the 1900. Do I make sense ?

[sarge12]

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@User470766 wrote:

Thank you for you response. My surprise is that in any other credit service like Creditkarma my available credit, total debt and available balance are from my actual open accounts. I have 2700 in total credit line and 1900 are in use. However in myFICO is appears that's all  old closed accounts that were charged off with balances are part of my total debt. My question is that if I dispute these 5 accounts to indicate closed, myFICO would only show that I have a debt of 1900 and not 9500. Is this correct ? 

This would have to make a big difference when trying to get a mortgage a year from now as my DTI would be much lower if not 0 debt when I pay off the 1900. Do I make sense ?

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Charged off does not mean the debt disappears...it can still be sold to collection agencies and you can still be sued for payment.

[User470766]

Yes I'm aware of this as a matter of fact they have all been sold to various collection agencies more than 3 years ago. My current utilization should not include amounts that have been charged off and sold to a collection agency. This has me confused... Yes I'm aware that the debt can creep up at any point and I've been sued already for other that I have since paid. 

i have 4 accounts currently in good standing and current ( these I've opened to rebuild 2 years ago ). They total 2700 in available credit with 1900 used. 

But them hem tere are 5 more that have been closed for years bite appear open in myFICO credit report and are going against my utilization and bringing my total active debt to 9k instead of the 1900 active debt. Credit karma shows these 5 old accounts as closed and only says I have a total of 1900 in debt. 

[sarge12]

I would not trust credit karma...it is a fako score and the vs3.0 that it supplies considers data that fico does not and vice-versa. I know of no creditors that pull vs3.0.

[User470766]

I do not trust credit karma and have now started the subscription from myFICO so I can monitor my real score. My question still hasn't been answered despite everybody's great help. Perhaps I, explaining myself bad. 

4 accounts are current and opened and show correctly on credit report. If you add the up I owe 1900 and all of the combined have a credit availibity of 2700. This is all good and correct.

5 old accounts that have been close for three years are showing as open with a total balance o 7100. These accounts have been charged off and closed for three years. 

The problem is both the 4 active open ones and the 5 old ones that are closed are all showing open and indicate that I owe 9000 and my utilization is almost 100 %

my question is .... If I dispute that the 5 old accounts are closed, this would have to bring my total debt to 1900 correct ?

the reason I say this is because in a mortgage it's much better for my income to debt ratio to owe 1900 then 9000 ...make sense 

[sarge12]

If it is showing as open I believe a dispute might keep it from figuring in the utilization, but I am unsure of this. In a mortgage they use a whole lot more than credit scores, they climb up your backside with a microscope...and DTI is not on a credit report because income is not there. What I am not sure about is wheather amounts owed on charged off accounts is included in the DTI ratio that a mortgage lender evaluates. I know on my first mortgage my wife at the time had a lot of charged off accounts, mostly medical, that I actually had to pay off prior to underwriting.

[Anonymous]

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@User470766 wrote:

I do not trust credit karma and have now started the subscription from myFICO so I can monitor my real score. My question still hasn't been answered despite everybody's great help. Perhaps I, explaining myself bad. 

4 accounts are current and opened and show correctly on credit report. If you add the up I owe 1900 and all of the combined have a credit availibity of 2700. This is all good and correct.

5 old accounts that have been close for three years are showing as open with a total balance o 7100. These accounts have been charged off and closed for three years. 

The problem is both the 4 active open ones and the 5 old ones that are closed are all showing open and indicate that I owe 9000 and my utilization is almost 100 %

my question is .... If I dispute that the 5 old accounts are closed, this would have to bring my total debt to 1900 correct ?

the reason I say this is because in a mortgage it's much better for my income to debt ratio to owe 1900 then 9000 ...make sense 

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Charged off revolving accounts with a balance are figured into you percentage of utilization whether the account is reported as opened or close and since they have not been paid then the debt is still owed. Your debt would be the 9000.00 not just the 1900.00 on your open accounts. Getting them changed to report as closed will make no difference.

[Anonymous]

I had a few debts that got sold off to collection agencies and they still played a factor in my utilization percentage until I paid them. It doesn't matter that they're opened or closed as far as your utilization rate is concerned. You still owe the money so it's still a debt. When obtaining a mortgage, I would imagine that over $7,000 in bad debt wouldn't look too good and I'm guessing they would certainly look into those debts. 

I'm not sure that disputing the status of your accounts would benifit you in the way that you think it would.