USAA Acct in Collections Causing Util to be over 100%

[Anonymous]

Hi Everyone,

 I am in the middle of the rebuild process and I am having to tackle Conserve Outsourcing and a charged off USAA credit card as my last 2 major baddies. I pulled my Fico 8 scores and its saying my util is at 122% with the outstanding balance of the card being about 3500 and my only 2 other credit cards being at 3% util. I've received numerous calls from CA's trying to collect on their behalf but USAA is still in possession of the account and I assume reporting util each month as it's charged off. My goal would be a PFD, but I wanted to get some advice and experience on how to tackle this. It was charged off in 2014 and my ultimate goal is to obtain a mortgage. My fico 8 scores are 607,608,619 and myfico mortage are 590,585,587 and I am certain I am losing big points because of this. Please help

[thornback]

Getting a deletion from the original creditor is difficult and kinda rare; PFDs generally work best with collection agencies in moving a collection from your reports.

You can send USAA a letter offering to pay the balance in full in exchange for deletion and await a response. Mail a letter, don't try by phone. If they agree, great, if not, it's certainly in your best interest to pay in full or settle the debt. Since they still own the debt, try to pay them directly and ask that they recall the collection.

Once the account reports closed with a zero balance, it is likely you'll see a pretty nice score jump from reducing utilization. It will also allow the account to age by preventing further negative updates.

[RobertEG]

Neither the fact that it was charged-off nor the fact that it is now being reported as also under collection discharges the debt, and thus has no impact on the percent util of the account.  It is only the current balance being reported by the creditor that is determining the % util.

Reduction in % util is obtained by paying down the balance.

You can make partial payments, thus gradually lowering your % util, or you can settle or pay in full, which will require update of the current balance to $0, and will then remove the account from future impact on % util