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Utilization vs paid charge off

New Member

Utilization vs paid charge off

I am trying to figure out best way to handle a couple of bills this month. I have been able to negotiate with Cavalry Portfolio to settle a charged off account and have it reported as Paid in Full. I currently have it set up to make this settlement payment in two payments over the next month.

However, I am able to pay it all in one payment this week if I pay less on my Capital One card before it’s statement date (will still be able to pay Capital One bill in full by bill due date). Would it be better to pay off Cavalry and be done with it and have higher utilization this month (33%) or keep utilization low (under 10%) and split the Cavalry payment into two?

I may be overthinking this, I am just anxious to get credit report cleaned up and want to make sure I am making the right move. Thanks for any help!
Message 1 of 9
8 REPLIES
Established Member

Re: Utilization vs paid charge off


@wrote:
I am trying to figure out best way to handle a couple of bills this month. I have been able to negotiate with Cavalry Portfolio to settle a charged off account and have it reported as Paid in Full. I currently have it set up to make this settlement payment in two payments over the next month.

However, I am able to pay it all in one payment this week if I pay less on my Capital One card before it’s statement date (will still be able to pay Capital One bill in full by bill due date). Would it be better to pay off Cavalry and be done with it and have higher utilization this month (33%) or keep utilization low (under 10%) and split the Cavalry payment into two?

I may be overthinking this, I am just anxious to get credit report cleaned up and want to make sure I am making the right move. Thanks for any help!

Sounds like you already verfied to Calvery that you own the debt so I would renegotiate your terms. Instead of having them report as paid in full have them delete the whole account. Be sure to get this in writing before you pay them a dime.

 

I would still dispute this account the CRA's to see if you can get it removed.

 

Also send them a DV letter.

 

Focus on your open accounts because this collection account will only help your scores if its removed completly.

 

DON'T PAY THEM A DIME!

Message 2 of 9
Established Contributor

Re: Utilization vs paid charge off

DV is completely meaningless in this case. OP already acknowledged that debt is his and valid.
Also, what exactly would he dispute with CRA? He/she never stated that there are inaccuracies in what's being reported.
While PFD may be the optimal resolution, it may not happen without payment in full.
OP, unless you're applying for something really import next month, 33% utilization for one month is definitely not the end of the world. You'll be fine.
Message 3 of 9
Established Member

Re: Utilization vs paid charge off

 


@wrote:
DV is completely meaningless in this case. OP already acknowledged that debt is his and valid.
Also, what exactly would he dispute with CRA? He/she never stated that there are inaccuracies in what's being reported.
While PFD may be the optimal resolution, it may not happen without payment in full.
OP, unless you're applying for something really import next month, 33% utilization for one month is definitely not the end of the world. You'll be fine.

There's always inaccuracies with CAs, just have to fight back.

Message 4 of 9
Established Contributor

Re: Utilization vs paid charge off

Which in most cases does not result in removal, only in correcting inaccurate info.
Bottom line is, frivolous dispute can back fire.

Message 5 of 9
Established Member

Re: Utilization vs paid charge off


@wrote:
Which in most cases does not result in removal, only in correcting inaccurate info.
Bottom line is, frivolous dispute can back fire.


Very true, it will be up to OP if he wants to take the risk or not.

Message 6 of 9
Community Leader
Legendary Contributor

Re: Utilization vs paid charge off

Is the creditor reporting the original account, or is only the debt collector reporting the collection?

Balance on a collection is not included in your % util calculation, only the balance on a reported OC account.

 

Who now owns the debt, the credtior or the debt collector?

If the debt collector now owns the debt, the debt balance on any OC account should already be updated to $0.

 

Message 7 of 9
New Member

Re: Utilization vs paid charge off

Only the debt collector is reporting the account. So I am not concerned about this charged off debt in terms of utilization. More concerned with how I should allocate my spend this month - to get this charge off account paid and closed and move on or to ensure that my over all utilization is low by paying off a larger chunk of Capital One before statement date.
Message 8 of 9
Frequent Contributor

Re: Utilization vs paid charge off

Having a higher utilization for a single month shouldn't hurt unless you are applying for something before you pay it down. That is unless you were going to allow it to be greater than 60% which might spook your current creditors if your scores are as bad as many in this section. That said, since you already arranged payments, you don't have to be in a rush to pay it early, though we all understand the relief of having it behind you.

After you pay, check your credit reports in a few months to make sure they updated properly. I noticed 18 months later, after paying mine, that they only updated 2 of the 3 reports and just had to file a dispute to correct the balance or do an early exclusion since it falls off in 10 months anyway. I'm hoping they find it easier to delete at this point rather than correct.

Good luck.
9/2017 FICO8: EQ:585, TU:549, EX:580 | No opened accounts | 1 unpaid CO, 1 paid CO + related Col | several lates 2.5+ yrs ago
Current FICO8: EQ:703, TU:671, EX:671 | CC Util 2% | 2 paid CO + 1 related Col (deleted on EQ) | 3x 30 day lates 3-6yrs ago
AAoA: 10 to 11 years; Opened Acc Only: 7 months
Credit Length: 20 years
INQ (Eq/Tu/Ex): 2 / 4 (4 for auto) / 6 (5 for auto)
In 6 months, all serious derogatories fall off.
Message 9 of 9