charge off question

[markcerm]

Hi,

 I am new to this site, just working on my credit after some years of falling behind a bit.

My question is i have a charge off credit card with a low balance owed around $500 it was opened in 2007 and last date they posted on credit report was jan of 2009. my scrore with eq is real low at 570. what kind of score increase would i see if i paid this in full in one payment?  I do have another unpaid balance from 2006 which is only around $400. I do have 2 very good installment loans active with no lates for the last 3 years but that is all the active credit on my report as of now.

thanks for all your help in this

mark

[llecs]

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

If I had to guess, and if this was a FICO score from myFICO.com you are comparing, and if that CC hadn't updated since early 2009, then I'd hazard a guess of no points gained if paid in full. Paying it  would prevent further damage if a CA ever were to report. I would recommend a PFD.

[RobertEG]

If it is a CO with no CA yet reporting, then you still have a balance due with the OC until paid

Payment of the debt, absent a prior PFD agreement, wont result in any deletion of any prior reporting of delinquencies or the CO done by the OC.

Once paid, you will lose the account totally in your % util calculation.  Thus, this acount by itself will no longer have a % util, and you will lose its former CL in calculation of your overall % util.  Depending upon its CL, it may, in fact, result in a decrease of FICO score.

[markcerm]

thank you for your posts.

a few more questions which is more effective should i just call the collection agency and ask for the pfd? or is it better to mail out a form for the pfd? the cl on the card was only $250 and the balance showing on reports is $469 and this is my only revoling debt on reports so paying that will help my util? another question is it better to just pay the whole charge to the collection agency or to make payments through them? the account is through first premier bank did anyone have any luck for them to do a PTD?

thanks again

mark

[llecs]

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@markcerm wrote:

thank you for your posts.

a few more questions which is more effective should i just call the collection agency and ask for the pfd? or is it better to mail out a form for the pfd? the cl on the card was only $250 and the balance showing on reports is $469 and this is my only revoling debt on reports so paying that will help my util? another question is it better to just pay the whole charge to the collection agency or to make payments through them? the account is through first premier bank did anyone have any luck for them to do a PTD?

thanks again

mark

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Always mail a PFD. A CA's word is never their bond and there are plenty of examples in here of a CA accepting a PFD over the phone, only to turn around and conveniently forget about the conversation and not delete. Always send a DV to any CA before offering to PFD, even if you know the debt is yours. A DV establishes the correct balance owed and also establishes the debt ownership.

For FP, you can try a PFD for sure, and maybe there's a sucess story in here somewhere, but after a couple of failed attempts, I'd PIF. FP isn't known for their general acceptance of a PFD. Since this TL hadn't updated in quite a while, I don't believe the balance or util are factoring into your utilization. You can always pull your FICO report to see if that's the case or not, but I doubt that it is. If it was, you might have seen a healthy score bump, but again your score would have been lower than what it is now.

[markcerm]

thanks again for the quick posts

i did pull my report from here on this report it doesnt have this credit card marked as a charge off and it is my only revolving account on the fico report it says my ratio of revolving balances is 188%. should i mail the DV form and the PTD form at the same time to the collection agency? I would like to get this done asap if possible. also my scores are 570 equifax, 626 experian and 676 on transunion. i would really like to hit 720ish this year.

[llecs]

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@markcerm wrote:

thanks again for the quick posts

i did pull my report from here on this report it doesnt have this credit card marked as a charge off and it is my only revolving account on the fico report it says my ratio of revolving balances is 188%. should i mail the DV form and the PTD form at the same time to the collection agency? I would like to get this done asap if possible. also my scores are 570 equifax, 626 experian and 676 on transunion. i would really like to hit 720ish this year.

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If the OC (the credit card company) is reporting a balance AND if the CA isn't reporting, then ignore the CA. Forget about them. I'd then skip the DV to the CA and send a PFD to the credit card company because they are the ones reporting.

If both the OC and the CA are reporting a balance, then post back because likely one is misreporting.

If you got your three scores from a service, and not a lender, and if all three came from the same source, then you wouldn't have any FICO scores. As of a couple years ago, consumers can't purchase their EX FICO from anywhere (though they can get it from a couple of sources). If that's the case, then, who knows, you may have higher FICO scores.

[markcerm]

wow im so glad i got on this site so much help here,

I pulled my 3 reports from 3 different online souces the equifax report is the one with the lowest score which is 570 . Before i posted on this site i did call first premier bank and they gave me a number to a collection agency. I think i made a mistake by saying that i have a fico report it is a equifax fico score. But all 3 reports are saying my balances on revolving debt is too high just the equifax report is saying a 188% . how would i find out who is reporting this with a balance? would it hurt to mail the forms to the credit card company and the collection agency?

[llecs]

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@markcerm wrote:

how would i find out who is reporting this with a balance? would it hurt to mail the forms to the credit card company and the collection agency?

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Look at your CRs. Look for the CC. If there is a balance in the field that says "current balance", "balance", "past due" (on some report formats) or someting like that and the balance is anything but $0, then the OC likely owns it. If you look on the collections side of the report and there is no CA collecting on behalf of that OC, then there's no CA reporting that debt. If both are correct, then the OC owns the debt and that's who the PFD should go to.

PFD letters are pay for delete letters. If the CA isn't reporting, you cannot send a PFD because the CA isn't reporting. A PFD letter is a request to any CA or OC to send you a letter acknowledging that they'll delete in exchange for a payment (there are PFD examples in these forums). If the OC/CA agrees, then you'd pay it and they'll delete as agreed. And only a PFD to the OC would result in the OC's deletion. Conversely, a PFD to a CA would only result in the CA's deletion. A PFD to a non-reporting CA wouldn't help any because the CA isn't reporting and a CA cannot tell the OC to delete. I'd leave the CA out of this entire process if the OC owns the debt.

You can also look at your FICO report. It may show a utilization percentage on pages 2 or 3 of the report. If you do some reverse math to come up with the 188%, you should find that First Premier still reports a balance and there impacts your util. In the end, you may have to skip the PFD tries after a couple and just pay it. I don't know about PFD odds with FP.

ETA....I should probably clarify that if an OC sells a debt, it will report as a paid charge-off with a balance of $0.

[RobertEG]

Who owns what,and who is reporting what, is confusing.  OCs COs, debt collecdtors, and CAs are are mentioned.

I suggest that you first outline what has actually happened regarding the debt, initially ignoring any credit reporting issues.

Did you have prior delinquencies under the OC account, before it was closed?  If so, what were there dates and severity?

Did the OC just close the account, or did they close it by way of doing a charge-off? Did the OC ever do a collection referal?

If so, was this referral by way of simply assigning collection activities, or did the OC sell the debt to the debt collector?

Any of those above actions permit, but dont require, either the OC or debt collector, to report those items to a CRA. Whether or not they are reported, the derogs still exist.  They usually only have to be dealt with, when and if reported, based on the state of the debt. One does not exclude the other.

For example, take a PFD.  As has been stated, who you can even offer any type of payment to, be it a PIF or a PFD, depends first on who owns the debt.

You may have an OC account, for example, where the OC has sold the debt to a debt collector, and the debt collector has not yet reported to a CRA.  Your CR would not show any debt due, period, but it is still out there.  To pay,you would have to locate the debt collector by means other than your CR. 

You may have an OC account that has been closed, with or without a reported CO, but it has been referred, and not sold,, to a debt collector.In that event, the OC still owns the debt.  Both the OC and the debt collector, if they chose, can report the same amount of debt under their separate accounts. But you could offer to pay either.

You could offer technically  a PIF or settlement offer to either, but the OC can decline to even discuss any payment with you, and instruct you to deal only with their agent, the debt collector.  IF the CO or debt colledctor has reported the item to a CRA, then that opens up your ability to try a PFD as an alternative to a PIF or settlement offer.  PFDs realate to your additinal contingency for CR deletion.