Should I pay off two credit card charge offs 1) capitol one 2) Beneficial Fin . Each around a $1000.00 each . TU score is 537 , need to start shooting for the 600 club . Thanks Toolhound
It's been a common misconception that paying off a charge-off or collection will raise your score. You need to get the creditor to accept payment for deletion of the tradeline, or to delete any derog info linked with the account.
Have not tried that approach to try to delete account . Any idea how many points I can expect to raise my score if they accept ? toolhound
A paid chargeoff is just as bad on your score as a chargeoff with a balance. So if you are going to pay, make sure that they give you, in writing, that they will delete. Look at my scores in my tagline, EX shows 1 pd chgoff and 2 lates, EQ shows 2 pd chgoffs and 2 lates, TU is clean. Now mind you, the TU score is bogus compared to FICO, but look at the difference. And it's mainly because of pd chgoffs.
Paying the charge off could also start the 7 years again depending on when it was. Delete or nothing!
Thats against the law, and if that should happen it would be a perfect reason to go after the CRA for deletion. 7 years +180 days after the original delinquency date that lead to a charge-off,repo, foreclosure (whatever). NOT from the date paid.
quote: Thats against the law, and if that should happen it would be a perfect reason to go after the CRA for deletion. 7 years +180 days after the original delinquency date that lead to a charge-off,repo, foreclosure (whatever). NOT from the date paid. But look at the next paragraph. (2) Effective date. Paragraph (1) shall apply only to items of information added to the file of a consumer on or after the date that is 455 days after the date of enactment of the Consumer Credit Reporting Reform Act of 1996.
True....so if the charge off was in 1996-97 then it's probably not affecting your score very much, and wouldn't change your score much, paid or not. It's totally your call, but Beacon brought up a very good point. If it IS that old ONLY go for deletion!!1
If you pay a charge off on an account from an account that was late Dec, 28, 1997 or before, the charge off stays on your report for another 7 years after you pay. Charge offs are bad, Id go for deletion regardless even though their effect is not as bad with age, they still hurt. Paying will not change the score whatsoever as per FI so why pay unless it is deleted?
Beacon- I got ya! LOL, it's late and I was being lazy! I was just trying to respond to you and answer the original question in one breath. I understand about the reaging the account. I was just saying if he WANTS to pay it and it was C/O before 12/28/96 then ONLY go for deletion (to avoid the reaging). If they refuse, then I wouldn't even bother paying if it is that old. He's probably sleeping and it was C/O in 1999 and we didn't even need to post...lol.
You guys sound very knowledgable in the credit arena . But you are wrong on one point i work 12 hr shifts at Boeing building 767's on graveyard . So i'am still awake and kicking. I'am going to go for full deletion or nothing at all !!!! Thanks toolhound
Beacon, I've got to disagree with you. Paying a debt does not restart 7 years! This is a common misconception. If anyone has a paid account and the 7 years restarted, that's re-aging! It can be removed because it's illegal. The amendment to the law makes it clear. I know you are thinking of the fact that the law didn't change until 1997 (I think) and therefore any account gone bad before then would not be subject to the law. Well anyone with this situation has a superior chance to get deletion. I think very few creditors are seperating bad accounts by year and applying different rules accordingly. I have an account charged off in 1995 and they did not re-age it because I paid. This issue has been thoroughly discussed on this board. Do a search and see.
You are quoting the starting time for the 7 year reporting period. If an account that has been charged off or placed for collections, is later paid, it does not restart the 7 year clock. Period.
2. Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (B) the consumer responds to post-chargeoff collection efforts by making a payment on the debt, or (C) the consumer disputes the account with a CRA? Does it matter whether the 7-year period has expired when any of these events occurs? No. In enacting the new provisions discussed above, Congress intended to establish a date certain -- 180 days after the start of the delinquency that led to the chargeoff -- to begin the obsolescence period. It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA. Enclosed are two staff opinion letters (Kosmerl, 06/04/99; Johnson, 08/31/98) that discuss the impact of these provisions, and the legislative history relating to their enactment, in more detail. Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a chargeoff.
Now I hope no one else states that paying a debt will re-start 7 year clock! Every once in while someone says it. Good research LKH.
I have been posting that part of the FTC opinion letter 3 times a week in regards to this subject. Maybe it was that way at one where paying would restart the 7 years, but not now.
