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Worth it to pay off, "charged off" AMEX?

RotaryP7
Valued Member

Worth it to pay off, "charged off" AMEX?

Need some advice; I have 2 accounts with AMEX that were charged off back in 2017. One of them was at $4,500 which I settled for less, $3,200 and paid it off. The other one is at $7,200 and I'm still paying it off. Is it worth paying it off? I just paid off one of the charged off accounts and it still stays "charge off," so it's still a negative on my credit report. I did get a letter stating it was paid off from AMEX, saying if I wanted to reapply for a card I'd have to wait 30 days I believe. 

 

What's the benefit in paying off these accounts? That I can maybe reapply for AMEX in the future?

 

Unless I need to wait 7 years, for the negative to be removed completely. 

Chase Freedom Unlimited $1K | Chase Freedom Flex $500 | Capital One Quicksilver $3.3K | Capital One SavorOne $1K | Discover IT $9K | AMEX BCE $1K | Apple Card $1.5K | AMEX ED $1K
Current FICO 8: EQ: 691 TU: 692 EX: 691
Message 1 of 13
12 REPLIES 12
ImTheDevil
Community Leader
Super Contributor

Re: Worth it to pay off, "charged off" AMEX?

The negative entry on your reports isn’t going anywhere until it’s run its course. By paying Amex what you owe them though, you can open the door to getting back in with them. The greater amount you pay out of the total owed can shorten the time it takes to get back in.


Platinum NPSL | Rose Gold NPSL | BCP | Delta Gold | Hilton Surpass | Hilton Honors | FNBO Prime Visa | FNBO Evergreen | PenFed PCR | Navy cashRewards | Navy Platinum | Apple | IT Cash | IT Chrome | GHSFCU Visa Plat | Quicksilver | Target | VS | Home Depot | Lowes | Sams MC | Firestone | Overstock | Kohl’s | Key Bank auto loan (2017 Audi A6 Premium Plus S-Line)





Message 2 of 13
joltdude
Community Leader
Senior Contributor

Re: Worth it to pay off, "charged off" AMEX?

Yes, yes paying off Amex can make the wait shorter and possible to get back in with Amex in the future... 

Message 3 of 13
RotaryP7
Valued Member

Re: Worth it to pay off, "charged off" AMEX?


@ImTheDevil wrote:
The negative entry on your reports isn’t going anywhere until it’s run its course. By paying Amex what you owe them though, you can open the door to getting back in with them. The greater amount you pay out of the total owed can shorten the time it takes to get back in.

Thanks for the reply. I do want an AMEX in the future so I'll pay it off. Btw, what do you mean with "run its course." You mean I cannot remove the charge off from my report until 7 years? Even if it's been paid off in full? One of the reasons I also wanted to pay them off was that negative entry on my report. 

Chase Freedom Unlimited $1K | Chase Freedom Flex $500 | Capital One Quicksilver $3.3K | Capital One SavorOne $1K | Discover IT $9K | AMEX BCE $1K | Apple Card $1.5K | AMEX ED $1K
Current FICO 8: EQ: 691 TU: 692 EX: 691
Message 4 of 13
DB2019
Regular Contributor

Re: Worth it to pay off, "charged off" AMEX?

If you want back in with AMEX, PIF.  I did this with a CO from 2016 and it was PIF in May.  Got approved the the Gold same month.

Rebuilding Since 2016
6/5/2019 - Fico 8 Scores - EQ 672 TU 683 EX 674
6/15/2019 - FICO 8 Scores - EQ 682 TU 698 EX 690
8/10/2019 - FICO 8 Scores - EQ 706 TU 705 EQ 689
9/15/2019 - FICO 8 Scores - EQ 710 TU 713 EX 690
6/6/2020 - FICO 8 Scores EQ 717 TU 720 EX 683
Message 5 of 13
ImTheDevil
Community Leader
Super Contributor

Re: Worth it to pay off, "charged off" AMEX?

OP, the statute for reporting a negative debt is seven years on your reports. They don’t disappear just because you pay them off - that doesn’t change the fact that it was a bad debt. Some lenders and CAs will delete derogs upon payment but by and large they’re the exception rather than the rule. You can attempt goodwill letters to remove it but odds are that it will remain. OCs rarely delete early, and Amex still owns your debt since they do all of their collections in-house.

Outside of success with goodwill letters, the only two ways to get them off early are Early Exclusion, or EE, which each bureau will grant - TU will remove upon request 6 months early, for EX it’s 3 months, and for EQ it’s 30 days. The other way is to be a NY resident at the time of chargeoff. NY has what’s called the purge law, where derogs remain for 5 years instead of 7 like the other 49 states.


Platinum NPSL | Rose Gold NPSL | BCP | Delta Gold | Hilton Surpass | Hilton Honors | FNBO Prime Visa | FNBO Evergreen | PenFed PCR | Navy cashRewards | Navy Platinum | Apple | IT Cash | IT Chrome | GHSFCU Visa Plat | Quicksilver | Target | VS | Home Depot | Lowes | Sams MC | Firestone | Overstock | Kohl’s | Key Bank auto loan (2017 Audi A6 Premium Plus S-Line)





Message 6 of 13
Aspireto850
Established Contributor

Re: Worth it to pay off, "charged off" AMEX?

FWIW: I would say the benefit of paying them back is the fact that you owe the debt and you’re honoring your financial commitment when you accepted the credit card. I know it’s not what we want to hear, or do, at times. The more we burn these companies the note stringent they get and the harder it becomes for the masses to obtain credit cards. Plus if I run for public office one day at least it won’t be one of the things they throw back in my face!!! LOL ( not trying to be preachy at all... believe me; .I’ve been there!!








Message 7 of 13
joltdude
Community Leader
Senior Contributor

Re: Worth it to pay off, "charged off" AMEX?

I’m not good on the minutiae of charge offs and Fico scoring but I do recall it being mentioned that Fico 9 treats paid off collections differently than previous versions and in your favor.
Message 8 of 13
satio
Frequent Contributor

Re: Worth it to pay off, "charged off" AMEX?


@RotaryP7 wrote:

Need some advice; I have 2 accounts with AMEX that were charged off back in 2017. One of them was at $4,500 which I settled for less, $3,200 and paid it off. The other one is at $7,200 and I'm still paying it off. Is it worth paying it off? I just paid off one of the charged off accounts and it still stays "charge off," so it's still a negative on my credit report. I did get a letter stating it was paid off from AMEX, saying if I wanted to reapply for a card I'd have to wait 30 days I believe. 

 

What's the benefit in paying off these accounts? That I can maybe reapply for AMEX in the future?

 

Unless I need to wait 7 years, for the negative to be removed completely. 


The other benefit  of paying off this charged off account is that it is currently counting against your total utilization further impacting your score.  PIF is of course best but even if you settle for less both actions bring the balance to zero and no longer impact your overall CL utilization.

 

I saw 40+ point (or more) boost across each CRA score when these were paid and my remaining CL balance utilization was < 8.9 percent (currently 1 percent).

 



Message 9 of 13
RotaryP7
Valued Member

Re: Worth it to pay off, "charged off" AMEX?


@satio wrote:

@RotaryP7 wrote:

Need some advice; I have 2 accounts with AMEX that were charged off back in 2017. One of them was at $4,500 which I settled for less, $3,200 and paid it off. The other one is at $7,200 and I'm still paying it off. Is it worth paying it off? I just paid off one of the charged off accounts and it still stays "charge off," so it's still a negative on my credit report. I did get a letter stating it was paid off from AMEX, saying if I wanted to reapply for a card I'd have to wait 30 days I believe. 

 

What's the benefit in paying off these accounts? That I can maybe reapply for AMEX in the future?

 

Unless I need to wait 7 years, for the negative to be removed completely. 


The other benefit  of paying off this charged off account is that it is currently counting against your total utilization further impacting your score.  PIF is of course best but even if you settle for less both actions bring the balance to zero and no longer impact your overall CL utilization.

 

I saw 40+ point (or more) boost across each CRA score when these were paid and my remaining CL balance utilization was < 8.9 percent (currently 1 percent).

 


Really? Even if it's charged off it affects utilization? I settled with one and I'm going to PIF the other, the greater amount. I already have a set payment arrangement with their lawyers. They actually wanted to sue me for the account at $7,200. It was higher than that but I've been paying it off. 

Chase Freedom Unlimited $1K | Chase Freedom Flex $500 | Capital One Quicksilver $3.3K | Capital One SavorOne $1K | Discover IT $9K | AMEX BCE $1K | Apple Card $1.5K | AMEX ED $1K
Current FICO 8: EQ: 691 TU: 692 EX: 691
Message 10 of 13
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