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Quick question on paying off old card balances


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Have almost a year of good payment history on 3 cards. 2 secured, one not secured. 

 

Total credit line is $1,800.00 (lame I know.. but you gotta start somewhere)

 

One of the big factors dragging my score down, is that due to 2 old credit card balances (about $3,000 in total) they are in collections for quite some time now, and are still reporting every month.

 

So even if I have a zero balance on my three active cards. It still shows that I have $3,000 balance (due to the old cars) so basically it looks like I'm 200% over my credit limit. I have the money to pay these old cards off, but what's the best approach?

 

PFD? Just contact them and pay it w/o asking for a delete, then they would report on the next cycle as being "0" balance and account closed?

 

Ideas, suggestions?

 

Thanks guys.. 

 

I want to get this handled today, but want to do it the right way for my credit.

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That's a better card/limit starter kit than the one I had when I first started here... so congrats on what you've built so far.  Keep it up.

 

As long as you have at least one major derogatory (including a paid CO) reporting your scores are going to be seriously impaired.

 

Are these accounts still within SOL?  Are the TLs with the balances still with the OCs, or do you have CAs reporting also?

 

My comment about your scores notwithstanding, that doesn't mean you shouldn't tackle these in the most optimal manner.  Your answers to my questions should give others the info they need to make recommendations.

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Just now, hegemony said:

are they out of SOL?

 

FWIW, a paid charge off is still a major derog.

Charged off in 2015 and 2016.  I understand that a paid charge off is a derog. Totally get it. The score simulator on Experian (if it's accurate) is saying that by paying down my credit card debt to below 30% bumps me like 50 points.  What I'm asking I guess, is:

 

1- Should I offer a PFD on these? 

2- Just pay in full and wait 30 days till they report balance as zero. 

 

I know that a derog is bad, but paying this off will get it so that the only revolving credit card balance is the one I'm acutally carrying on my three cards. And I keep those below $100.00

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On 7/12/2018 at 1:04 PM, westcoastguy said:

 The score simulator on Experian (if it's accurate)

 

It's not. Ignore it completely.

 

OC CO'd accounts are rarely PFD'd. But they are going to hurt your score for the full 7 years unless you can dispute them off earlier. 

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I recently had a CC charge off reporting on me plus a collection agency reporting the same debt. The charge off did not affect my utilization, as they were showing a $0 balance on that, because it was a charge off. I think if your charge off is still being reported as an open account with a balance, you could dispute because a charge off is not an open account. I think you need to double check exactly how it’s being reported. 

 

When I paid the collection in full, that was deleted (I suspect because they were reporting wrong). I ended up getting the charge off removed as well, so that whole tradeline is gone, thankfully. 

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Here is how one of them looks on my report. (Discover)

 

 

       

 

DISCOVER FIN SVCS LLC

601100XXXXXX

$1,790

$500

358%

Revolving

Negative

Aug 1, 2013

 

So from what I can see, they are actively reporting this account every month, and showing my balance as $1,790 and with the limit being $500, I'm getting hit on two fronts every month.  It's negatively affecting my % of credit usage, plus showing as a past due amount, PLUS showing over limit. 

 

So, back to my question. Would it be a good idea to pay this off? What would the affect be? 

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26 minutes ago, westcoastguy said:

 

Here is how one of them looks on my report. (Discover)

 

 

       

 

DISCOVER FIN SVCS LLC

601100XXXXXX

$1,790

$500

358%

Revolving

Negative

Aug 1, 2013

 

So from what I can see, they are actively reporting this account every month, and showing my balance as $1,790 and with the limit being $500, I'm getting hit on two fronts every month.  It's negatively affecting my % of credit usage, plus showing as a past due amount, PLUS showing over limit. 

 

So, back to my question. Would it be a good idea to pay this off? What would the affect be? 

What would the effect be?  You mean on your scores?

 

If that's what you're asking...

 

Educated guess (wait for other input before acting):  Paying this off won't do much of anything for your scores because it will report as a paid CO and you still have another account in collections.  

 

There isn't much difference betweeen one paid and one unpaid CO, vs two unpaid COs, even if you have one fewer maxed cards in the former case.

 

If you're asking how the paid CO would look on manual review, it would look much better than an unpaid CO.

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Just now, hegemony said:

what are you trying to accomplish?

Trying to stay under 20% or so of credit utilization. But since I have these two old card accounts that are still reporting balances, even if I zero out my three active cards (which I just did) it still shows a high utilization on my report (since these old accounts are reporting)

 

Does that makes sense?

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5 minutes ago, cv91915 said:

What would the effect be?  You mean on your scores?

 

If that's what you're asking...

 

Educated guess (wait for other input before acting):  Paying this off won't do much of anything for your scores because it will report as a paid CO and you still have another account in collections.  

 

There isn't much difference betweeen one paid and one unpaid CO, vs two unpaid COs, even if you have one fewer maxed cards in the former case.

 

If you're asking how the paid CO would look on manual review, it would look much better than an unpaid CO.

Specifically what I'm asking is this: Will paying this off, in effect lower my credit utilization rate on my overall credit report? Which I think it will. (hoping it will anyway)

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3 minutes ago, westcoastguy said:

Specifically what I'm asking is this: Will paying this off, in effect lower my credit utilization rate on my overall credit report? Which I think it will. (hoping it will anyway)

Yes.  I went a step further and explained what that means in real life.

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