Paid Chargeoff

[Anonymous]

Hi.

I'm new to the forums. I have one baddie that appears on TU, EQ and EX - a chargeoff - balance of $246. I just paid it today. I was told that it will now appear as a paid chargeoff. What boost if any will this have to my Fico 2 and Fico 8? I am trying to raise my Fico 2 so I can refinance in the next 2 months. My middle mortgage score is 696. Thanks for any assistance.

[Remedios]

You will experience a scoring drop at first once balance updates to $0.00.

It's counterintuitive that a "good action" would lead to score dropping, but that's what happens when there is an update to a negative account.

There is no reward for paying off CO. You might gain some points if balance from charge off was affecting your utilization, but that's about it.

Once charge off is paid and reporting/updating stops, your scores can gradually recover somewhat, but it will hurt as long as it stays on your credit report as that's the most "severe" derogs outside public record ones..

[Anonymous]

@Anonymous 

I am on a dirty scorecard and paid a CO to $0 -  I gained 5-7 Fico 8 points...not sure the response my mortgage scores had. I believe the bump was because of a UTI threshold but I am still a newbie so I can't swear to it. 

[Anonymous]

Whether or not you have a score drop or a score gain depends on whether or not it was updating regularly. If it was, then the effects you see are from utilization gains.

If it was not updating regularly then The total period of delinquency catch up offsets the utilization gains.

Read the below for further information:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/General-Scoring-Primer-and-Version-8-Mas...