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Scoring effect on Charge Offs

sjt
Senior Contributor

Scoring effect on Charge Offs

Would there be a difference in FICO scoring if a  charge off is reporting monthly as oppose to just reported at the time of occurance?

American Express: Platinum Charge, Optima, Business Gold, Delta Business Platinum, Business Cash
Barclays: Arrival+ WEMC
Capital One: Savor WEMC, Venture VS
Chase: Freedom U VS, CSR VI
Citibank: AAdvantage Platinum WEMC
Elan/US Bank: Fidelity VS
Credit Union: Rewards Visa
FICO 08: (3.04.21) EX: 838 / EQ: 850 / TU: 848
Message 1 of 5
4 REPLIES 4
gdale6
Moderator

Re: Scoring effect on Charge Offs


@sjt wrote:

Would there be a difference in FICO scoring if a  charge off is reporting monthly as oppose to just reported at the time of occurance?


Yes, if its updating monthly it keeps your Fico depressed and your score cannot recover until it stops the updating and it begins to age. It always looks new to Fico even if it was say 6 yrs ago that it actually happened.

Message 2 of 5
sjt
Senior Contributor

Re: Scoring effect on Charge Offs


@gdale6 wrote:

@sjt wrote:

Would there be a difference in FICO scoring if a  charge off is reporting monthly as oppose to just reported at the time of occurance?


Yes, if its updating monthly it keeps your Fico depressed and your score cannot recover until it stops the updating and it begins to age. It always looks new to Fico even if it was say 6 yrs ago that it actually happened.


Thanks for the response!

 

So the only way to stop the monthly updating is to pay off the debt or if gets sold to a JDB right?

 

Also my friend is paying off an Amex charge off account, so this will mean she will have to wait until it is paid off. Once it gets paid off when will she start to see a raise in her score?

 

 

American Express: Platinum Charge, Optima, Business Gold, Delta Business Platinum, Business Cash
Barclays: Arrival+ WEMC
Capital One: Savor WEMC, Venture VS
Chase: Freedom U VS, CSR VI
Citibank: AAdvantage Platinum WEMC
Elan/US Bank: Fidelity VS
Credit Union: Rewards Visa
FICO 08: (3.04.21) EX: 838 / EQ: 850 / TU: 848
Message 3 of 5
gdale6
Moderator

Re: Scoring effect on Charge Offs


@sjt wrote:

@gdale6 wrote:

@sjt wrote:

Would there be a difference in FICO scoring if a  charge off is reporting monthly as oppose to just reported at the time of occurance?


Yes, if its updating monthly it keeps your Fico depressed and your score cannot recover until it stops the updating and it begins to age. It always looks new to Fico even if it was say 6 yrs ago that it actually happened.


Thanks for the response!

 

So the only way to stop the monthly updating is to pay off the debt or if gets sold to a JDB right? If its sold to JDB the OC updates balance to 0 and may or may not stop the updating, selling the debt means a large loss to them. Pay off or settle will typically stop the updating by an OC.

 

Also my friend is paying off an Amex charge off account, so this will mean she will have to wait until it is paid off. Once it gets paid off when will she start to see a raise in her score? There is no specified time when one begins to see score increases from aging derogs. I have seen posts that say a few months others a year and then again it may not even be because of this debt aging it could be something else in file. Its all based on overall credit profile and everyones is different.

 

 


 

Message 4 of 5
sjt
Senior Contributor

Re: Scoring effect on Charge Offs

Belated thank you for the response.

 

My friend was able to pay off her three charged off Amex accounts in full and will get an Optima Card in the next month or so.

 

When Amex reports those accounts with a zero balance, do you think there might be a score jump?

 

American Express: Platinum Charge, Optima, Business Gold, Delta Business Platinum, Business Cash
Barclays: Arrival+ WEMC
Capital One: Savor WEMC, Venture VS
Chase: Freedom U VS, CSR VI
Citibank: AAdvantage Platinum WEMC
Elan/US Bank: Fidelity VS
Credit Union: Rewards Visa
FICO 08: (3.04.21) EX: 838 / EQ: 850 / TU: 848
Message 5 of 5
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