cancel
Showing results for 
Search instead for 
Did you mean: 

Should I pay/settle these CO's ?

tag
raisinitup
Regular Contributor

Should I pay/settle these CO's ?

So, I'm a bit confused on the FICO8 vs 2,4 & 5 mortgage scores. Scores are 100 points different from from EQ 5 to the FICO 8

 

Here's the situation....

 

Discover 0/500

Chase 31/500

9 student loans TL's with a 6 increasing lates (30-150) for each tradeline from late 2019 to early 2020 (I've since refinanced into 1 loan and it is current)

2 car loans - both current and never late (5yr and 1 yr old)

 

Besides the SL's, here's what I think is holding my scores down but not sure...

 

4 Comenity Bank store card CO's & 2 DSNB cards

#1600 limit917 c/o
#21100 limit1479 c/o
#3500 limit825 c/o
#41200 limit

1554 c/o

#5 DSNB/Amex5000 limit

5477 c/o

#6 DSNB/Macys$3500 limit

4042 c/o

 

These C/O's are updating every month and I feel like they may be depressing my scores regardless of what I do (I've paid off and gotten removed 3 coll's in the past 30 days). 

 

AZEO seems to be working on the current cc's (got about a 10 pt bump from paying one down to zero) - any suggestions based on the details above that could help me get the mortgage scores up ? 

 

 

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
9 REPLIES 9
OmarGB9
Community Leader
Super Contributor

Re: Should I pay/settle these CO's ?

Yes all those COs are definitely suppressing your scores. Mortgage scores, which you are asking about, LOVE zero balances. Those CO accounts count as maxed out credit cards for utilization purposes, so they are skewing your true utilization. If you can pay them in full or settle them, it should help both your FICO 8 and your 3 mortgage scores.


Last App: 1/10/2023
Penfed Gold Visa Card

Currently rebuilding as of 04/11/2019.

Starting FICO 8 Scores:




Current FICO 8 scores:


Message 2 of 10
HowDoesThisAllWork
Frequent Contributor

Re: Should I pay/settle these CO's ?

@raisinitup 

 

The COs are indeed suppressing your score.

 

They continue to update each month (I would actually check to see if it isnt really each week or every other week....I speak from experience with Merrick on that) as there is a balance due.  So, the "Date Reported" field is going to continue to chage as each creditor updates the CRAs. Check the "Debt-to-Credit Ratio" field for each as well.  You will see what I mean....

 

Once a CO is paid in full and the balance is $0 then the creditor is not supposed to update the account any longer (essentially, the data in the "Date of Last Payment" field will become the data in the "Date Updated" field.....I say "not supposed to update any longer" but that does not necessarily stop them).

 

Mortgages will also REALLY like to see each of these COs paid in full vs. some agreement (in which you pay 30% - 50% or whatever of the original amount owed).  That would be your call as to what works best for you and your situation.  I have an on-going CO with Merrick (paid in full - my choice - back in December, 2020 but it is still being updated and it is suppressing my scores) so this topic is near and dear to my heart right now.

 

As @OmarGB9 stated, mortgages also really do not like to see toooooo many accounts with balances.  So, his suggestion of AZEO is a good one.

 

Just be careful that Chase is not the account reporting $0.  If I recall, this is a bad idea and will backfire (I honestly do not recall the "why" behind that....I just know that I remember that point and am hopeful that someone else can fill in the "why" behind me).

 

Furthermore, I believe that you need at the very least three credit cards for AZEO to actually work (something about FICO really likes to see 40% or fewer of resolvers reporting a balance......so 1 out of 3 is - at least when I went to high school back in the early 80s - 33%.....thus, less than 40%).

 

I do believe that you received that 10 point bump for paying down (going to ass/u/me here) the Discover card (aka, reduced reported balance vs. last month).  I do not believe that bump was for "AZEO" (as you can not have that with two credit cards.....it takes three at least).  Maybe someone with more confidence in that answer can confirm for us (or tell me that I am a dumbsaa (ha! ha! see what I did there?) and tell you that you are right)?

 

Find out where those COs are at the moment (that is not always as obvious as it sounds).

 

Back in November of 2019 Merrick authorized a Collections Agengy to attempt to collect the debt on their behalf....so I made the payments to the Merrick in-house Collections Agency and once that process was done the CA turned it over to Merrick - pardon my lazy language there.

 

You say that you have paid in full and had removed three of the COs in the last 30 days?  So, the six that you listed are what remain (so you had a total of nine.....you say you have paid off and had three removed......so the six that you listed are 'remaining'?  Or, of the six that you listed are there ***ONLY*** three remaining at this point?)

FICO 8 Scores as of 2022 JULY 04:

FICO 9 Scores as of 2022 JULY 04:

FICO Auto 8 Scores as of 2022 JULY 04:

FICO Auto 9 Scores as of 2022 JULY 04:

FICO Bankcard 8 Scores as of 2022 JULY 04:

FICO Mortgage 2/4/5 Scores as of 2022 JULY 04:

Starting Score: Exp 627
Current Score: Exp 713
Goal Score: Exp 750+

Take the myFICO Fitness Challenge
Message 3 of 10
raisinitup
Regular Contributor

Re: Should I pay/settle these CO's ?

@HowDoesThisAllWork , thank you for the detailed advice. I actually paid off 3 collections in the past 30 days. So the CO's listed are actually accurate (bummer, I know).


@HowDoesThisAllWork wrote:

@raisinitup 

 

The COs are indeed suppressing your score.

 

They continue to update each month (I would actually check to see if it isnt really each week or every other week....I speak from experience with Merrick on that) as there is a balance due.  So, the "Date Reported" field is going to continue to chage as each creditor updates the CRAs. Check the "Debt-to-Credit Ratio" field for each as well.  You will see what I mean....

 

Once a CO is paid in full and the balance is $0 then the creditor is not supposed to update the account any longer (essentially, the data in the "Date of Last Payment" field will become the data in the "Date Updated" field.....I say "not supposed to update any longer" but that does not necessarily stop them).

 

Mortgages will also REALLY like to see each of these COs paid in full vs. some agreement (in which you pay 30% - 50% or whatever of the original amount owed).  That would be your call as to what works best for you and your situation.  I have an on-going CO with Merrick (paid in full - my choice - back in December, 2020 but it is still being updated and it is suppressing my scores) so this topic is near and dear to my heart right now.

 

As @OmarGB9 stated, mortgages also really do not like to see toooooo many accounts with balances.  So, his suggestion of AZEO is a good one.

 

Just be careful that Chase is not the account reporting $0.  If I recall, this is a bad idea and will backfire (I honestly do not recall the "why" behind that....I just know that I remember that point and am hopeful that someone else can fill in the "why" behind me).

 

Furthermore, I believe that you need at the very least three credit cards for AZEO to actually work (something about FICO really likes to see 40% or fewer of resolvers reporting a balance......so 1 out of 3 is - at least when I went to high school back in the early 80s - 33%.....thus, less than 40%).

 

I do believe that you received that 10 point bump for paying down (going to ass/u/me here) the Discover card (aka, reduced reported balance vs. last month).  I do not believe that bump was for "AZEO" (as you can not have that with two credit cards.....it takes three at least).  Maybe someone with more confidence in that answer can confirm for us (or tell me that I am a dumbsaa (ha! ha! see what I did there?) and tell you that you are right)?

 

Find out where those COs are at the moment (that is not always as obvious as it sounds).

 

Back in November of 2019 Merrick authorized a Collections Agengy to attempt to collect the debt on their behalf....so I made the payments to the Merrick in-house Collections Agency and once that process was done the CA turned it over to Merrick - pardon my lazy language there.

 

You say that you have paid in full and had removed three of the COs in the last 30 days?  So, the six that you listed are what remain (so you had a total of nine.....you say you have paid off and had three removed......so the six that you listed are 'remaining'?  Or, of the six that you listed are there ***ONLY*** three remaining at this point?)



I was advised to leave the CO's alone because our income was more than sufficient and the DTI was very low. It's all about the scores and I can't seem to get them to budge. Good news is I am being added as an AU to a few cards that should report at the beginning of Sept (Cap1 & Citi - AAOA 4 yrs and zero balance). Thanks for the advice on Chase as well as I didn't know that but I will be sure to always keep the balance on that one. It's good to know that another bump may be in my future because I'll have 4 cc accounts and will actually be able to see the full effect of AZEO. 

 

Do you think I should settle the CO's with Comenity before they go to a CA or wait ? 

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
Message 4 of 10
HowDoesThisAllWork
Frequent Contributor

Re: Should I pay/settle these CO's ?

@raisinitup

 

I would always, as a starting point, suggest handing anything that is negative as quickly as possible.  So, general comment, I would indeed attempt to handle the COs before they go to a Collections Agency.  That is, if Commenity still is the legal owner of each debt *AND* has not yet authorized a Collections Agency to attempt to receive payment on their behalf.

 

Additionally, if Comenity has sold any of these to a Collections Agency *AND* will still speak to you about them, then I would attempt to get Commenity to recall the Collections and to deal with Commenity directly.

 

Remember, a charge off is simply an accounting term that is deployed by the Creditor, indicating that they have not received payment and that they have decided that they will not likely and, as such, they have moved this account from their "asset page" to their "liability page".  It does not remove your need to pay (either in full or in part).

 

Also, Charge Offs are the second worst thing on a credit report (with a bankruptcy being the worst).

 

So, dealing with these (all of them....) is going to be super important (well, if I might inject my opinion here.....you may or may not agree with that comment......which is perfectly fine!  This is your situation - only you can best decide what works for you and what does not work for you).

 

So, yeah - go for cleaning things up!  Now, that assumes that these COs are not going to fall off of your credit reports in the next few months!

 

And, if there is a balance on each of the COs, then the creditor has every legal right (at least as I understand this) to continue to update these charge off accounts each month (or week or every other week....for that matter) which will continue to suppress your credit score.  Only when the last CO is removed will your score jump up.  In the mean time, you need to get those updates stopped.   That is accomplished by paying the balance down to $0 (or, to whatever you and they agree to....).

 

Does this make any sense at all? :-)

FICO 8 Scores as of 2022 JULY 04:

FICO 9 Scores as of 2022 JULY 04:

FICO Auto 8 Scores as of 2022 JULY 04:

FICO Auto 9 Scores as of 2022 JULY 04:

FICO Bankcard 8 Scores as of 2022 JULY 04:

FICO Mortgage 2/4/5 Scores as of 2022 JULY 04:

Starting Score: Exp 627
Current Score: Exp 713
Goal Score: Exp 750+

Take the myFICO Fitness Challenge
Message 5 of 10
raisinitup
Regular Contributor

Re: Should I pay/settle these CO's ?

@HowDoesThisAllWork this makes TOTAL sense ! Thank you, calling Comenity today. So appreciate you guys taking the time to lay this all out for me. Will keep the forum posted on increase (or lack thereof) when they update. 

 

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
Message 6 of 10
HowDoesThisAllWork
Frequent Contributor

Re: Should I pay/settle these CO's ?

@raisinitup 

 

You are most welcome.  I am glad that this helps.

 

I am not familiar with how Commenity works with respect to Collections | Charge-Offs so I would take a look at the following link (it could be useful):

 

https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Collection-agencies-that-do-PFD/td-p/5675391

 

If they have already turned things over to a CA and they give you the name(s), then look that CA/those CAs up on that link.  Some CAs will not do a PfD until the account is two years old (as an example).  So, I would not want to paint a fairly great picture for you only for you later to find out that you have to XYZ (fill in the blank here.....it can be anything.....I have read lots of "interesting" requirements that some CAs have).  

FICO 8 Scores as of 2022 JULY 04:

FICO 9 Scores as of 2022 JULY 04:

FICO Auto 8 Scores as of 2022 JULY 04:

FICO Auto 9 Scores as of 2022 JULY 04:

FICO Bankcard 8 Scores as of 2022 JULY 04:

FICO Mortgage 2/4/5 Scores as of 2022 JULY 04:

Starting Score: Exp 627
Current Score: Exp 713
Goal Score: Exp 750+

Take the myFICO Fitness Challenge
Message 7 of 10
Anonymous
Not applicable

Re: Should I pay/settle these CO's ?

Just a heads up...I have some very old COs, some within a year of being at the 7 year threshold where they get removed from credit reports, and spoke with a Loan Officer because I am not in a position to wait another year on a mortgage and he said with how old they are, it won't make a difference of settling for less or settling for full.  Only reason it would matter is if you can get a PFD.  Just seeing the balance at $0 and the matter they likely are reporting a high utilization is making a negative impact.  First Premier had two CO'S, one at 185% utilization and another around 170%.  That hurt mine much more than the CO itself.

Message 8 of 10
raisinitup
Regular Contributor

Re: Should I pay/settle these CO's ?

@Anonymous thanks for the info. Unfortunately these are only about 2 years old and were reporting every month which was killing my utilization points. @HowDoesThisAllWork , I settled all 4 today for 50% . They were still with comenity so at least I don't have to worry about a CA popping up down the line. Feels better to have them taken care of. Hoping to get some fico love when they report at the end of the month. 

 

12/11/12 Starting Score EQ FICO - 583/ TU FICO - 615/
4/1/13 - Lender Pull - TU - 645 EQ - 675 EX 712
Each One - Teach One
Message 9 of 10
HowDoesThisAllWork
Frequent Contributor

Re: Should I pay/settle these CO's ?

@raisinitup 

 

Awesome news!  So glad to hear that you have these off of your plate now.  Interested to see how things play out.

FICO 8 Scores as of 2022 JULY 04:

FICO 9 Scores as of 2022 JULY 04:

FICO Auto 8 Scores as of 2022 JULY 04:

FICO Auto 9 Scores as of 2022 JULY 04:

FICO Bankcard 8 Scores as of 2022 JULY 04:

FICO Mortgage 2/4/5 Scores as of 2022 JULY 04:

Starting Score: Exp 627
Current Score: Exp 713
Goal Score: Exp 750+

Take the myFICO Fitness Challenge
Message 10 of 10
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.