Which to pay off: Collection/Charge-Off vs. Installment Loan

[nmk94]

I'm getting a bonus at work and am trying to figure out the best thing to do with the $. I could pay a charge-off that is in collection, or pay off an installment loan (if I paid off the loan, I would still have one more installment loan, so I would not be eliminating the only one).

Which would be best for boosting my score?

Thanks in advance.

[FireMedic1]

---

@nmk94 wrote:

I'm getting a bonus at work and am trying to figure out the best thing to do with the $. I could pay a charge-off that is in collection, or pay off an installment loan (if I paid off the loan, I would still have one more installment loan, so I would not be eliminating the only one).

Which would be best for boosting my score?

Thanks in advance.

---

JMO. I'd pay the charge off in collections. If the 2 loans have no lates and perfect payments. They're helping you. The charge off is killing you. Plus it looks better to creditors that you paid your debts off. Dont know who has the collection account. You could always ask for pay for delete. But thats a rare conclusion. So my vote is the charge off.

[RobertEG]

What is the date of initial delinquency with the original creditor that led to the charge-off by the creditor and the reported collection?

That will determine both how long the CO and collection can remain in your credit report, and will also likely be the date for determining whether or not the debt is still within the statute of limitations for filing a civil action.

Of particular importance is determing whether the delinquent debt is still within SOL, which determines whether you are still subject to a possible civil judgment.

Paying an installment loan in good standing normally has minimal scoring impact, as the remaining balance on an installment loan is low scoring impact, and is not part or your scoring under the more significant factor of % util, which only applies to revolving debt.