Settling an account and score impact

[funkiehouse]

Quick question. If you settle an account that is reporting KD/CO every month (in other words active each month), does settling that account and having the KD stop reporting monthly going to have a major impact (drop) on scores since it's new activity? I would think since it's already actively updating each month that it may not drop scores too much.

 

I don't expect a jump in score but I think having this $6k balance gone will help and I may need it to be gone to get approved for an investment. This is my repo that was CO 10/09. I would have liked to have waited this one out but I think settling it will help with the investment.

[fury1995]

Good question..

 

I can tell you this.

 

Not quite the same but may help.

 

DH had a BOA chargeoff from 2009 that was dormant with a zero balance then started updating WITH a balance after a dispute that went sideways to KD/CO and his score did not drop. Reported that way for 6 months and then suddenly disappeared. Score did not go up when that happened either.

Edited April 14, 2015 by fury1995

[EarnIt]

In my experience (CC COs not repos), if the CO has a balance, then it is impacting overall utilization. When I settled my CC COs, the scores went up because of the significant change is utilization. In some cases the change was small, in some cases the change was more depending on the balance settled.

[funkiehouse]

Thanks for the replies and the examples. I don't really think much will happen if I do settle it. I don't really care if it reports as settled either. I don't even know if they would take a settlement at this point because I have given them hell trying to get rid of it.