Would utilization really matter if...

[abbafan]

...I have 5 charge-off accounts that are dragging my scores down? They're to fall off in 2 years. My utilization ratios is at 23% at the moment. If I bring it down to, let's say, 7% how greatly would it affect my fico scores? My current scores are in the signature (and I'm not sure why TU is 50 points higher). 

[907grown]

Your CO' s are 5 yrs old if they will fall off in two years, so although they're there and pulling your score, it's probably not as much as you think. You will see a reasonable bump if you drop your util by 15%. Good luck!!

[RobertEG]

Are they paid off?

If not, they could also become a collection.

Do you have other major derogs?

Score improvement with exclusion of a major derog is often just as dependent upon what remains as what is excluded.

[abbafan]

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@RobertEG wrote:

Are they paid off?

If not, they could also become a collection.

Do you have other major derogs?

Score improvement with exclusion of a major derog is often just as dependent upon what remains as what is excluded.

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Actually 6 charge-offs and one of them is paid off. All of them are still owned and being reported by the original creditors, however, collection agencies have tried contacting me in the past. So they're already "in collection". No other derogs or negative info (except for a 30-day late payment on one of the open credit card accounts back in 2010).

[RobertEG]

I would be concerned, particarly as credit report exclusion nears, of the debt collectors reporting their collections, thus doing further score damage.

As for utilization, if the debt has been charged-off and you are aware there is a debt collector, does the debt collector now own the debt?

Sale to a debt collector is common for CO's debts.

If so, then the OC should be reporting a debt balance of $0.

The point is whether the balances on those accounts are currently being factored into your u% util.

[abbafan]

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@RobertEG wrote:

I would be concerned, particarly as credit report exclusion nears, of the debt collectors reporting their collections, thus doing further score damage.

As for utilization, if the debt has been charged-off and you are aware there is a debt collector, does the debt collector now own the debt?

Sale to a debt collector is common for CO's debts.

If so, then the OC should be reporting a debt balance of $0.

The point is whether the balances on those accounts are currently being factored into your u% util.

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The debt collector doesn't own the debt and the debt is being reported by the oc's (3 by USAA, 1 by Macy's, 1 by First Premier Bank, and 1 (paid, $0 balance) by AAFES) with the balances. I'm not sure if the balances are factored into my utilization. That's a good question and I haven't thought of that, actually. 

[gdale6]

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@abbafan wrote:

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@RobertEG wrote:

I would be concerned, particarly as credit report exclusion nears, of the debt collectors reporting their collections, thus doing further score damage.

As for utilization, if the debt has been charged-off and you are aware there is a debt collector, does the debt collector now own the debt?

Sale to a debt collector is common for CO's debts.

If so, then the OC should be reporting a debt balance of $0.

The point is whether the balances on those accounts are currently being factored into your u% util.

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The debt collector doesn't own the debt and the debt is being reported by the oc's (3 by USAA, 1 by Macy's, 1 by First Premier Bank, and 1 (paid, $0 balance) by AAFES) with the balances. I'm not sure if the balances are factored into my utilization. That's a good question and I haven't thought of that, actually. 

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As far as CO being factored into ones utilization percentages its my understanding it only happens if a corresponding CL is also being reported by the OC on the COed TL. This is easy to find out by figuring out what your util is on your open  cards and seeing what a credit pulling service says your util is.

[Kirmie2010]

Your utilization is already somewhat low I dont think you would see a huge jump in scores but you should see an increase!

[Anonymous]

They most likely ARE going against your UTI%. Pay your UTI down to <10% and you should get a score bump. If you don't then you know that those balances are hurting your UTI%.