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My credit score right now is 650 according to chase. I want I know if it would be better to pay off closed accounts first,  which I negotiated low interest rates for a few years ago,  or pay down the active ones first,  some of which are near max end have higher rates. 

 

Does having these unpaid closed accounts worsen my credit, or does the fact that I am paying them monthly improve my credit? 

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Having outstanding balances on closed accounts is known to result in a significant FICO hit.  If you pay those to a $0 balance, you should be on your way to a significant FICO boost.  However, if you have open accounts at high utilization as well, you likely won't see much of that hypothetical boost until you also reduce balances on your highly utilized open accounts.

 

In your current situation, it may be worthwhile to first focus on getting each of your higher rate accounts down to at least 50% utilization before turning your attention to repayment of your lower rate closed accounts.

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Having outstanding balances on closed accounts is known to result in a significant FICO hit.  If you pay those to a $0 balance, you should be on your way to a significant FICO boost.  However, if you have open accounts at high utilization as well, you likely won't see much of that hypothetical boost until you also reduce balances on your highly utilized open accounts.
 
In your current situation, it may be worthwhile to first focus on getting each of your higher rate accounts down to at least 50% utilization before turning your attention to repayment of your lower rate closed accounts.
Does this apply to charge offs? I was under the impression that paying off a closed or charged off account could actually hurt your scores.

Sent from my SM-G965U using Tapatalk

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3 hours ago, j7n1o7 said:

Does this apply to charge offs? I was under the impression that paying off a closed or charged off account could actually hurt your scores.

Sent from my SM-G965U using Tapatalk
 

 

Very critical point ...

 

The issue with charge offs occurs when they've sat on your file for 1 or more years.  Renewed activity on a tradeline (such as a payment) can cause it to be scored as a recent event, such that even if the charge off occurred 5 years ago, it treats everything as if it just occurred yesterday.  Suddenly, an adverse event that had diminished FICO impact with age flares up as if it occurred yesterday.

 

I don't have good data on whether newer models (8 or 9) are impacted similarly, but this definitely impacts one's mortgage scores and has been the source of very sour surprises when the expectation was for a positive outcome for repayment.  (This is one reason why it's suggested that if a mortgage broker advises a past charge off must be repaid in order for a mortgage to be approved that you should arrange that such repayment be effected out of the closing, and not before.)

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On 4/10/2021 at 2:17 PM, MidnightBluJ said:

My credit score right now is 650 according to chase.

 

As a point of clarification, if you are referring to Chase Credit Journey, that's a fake skore that Chase won't even use to evaluate your creditworthiness.

 

I only look at Chase Credit Journey to take screenshots like this one while I'm explaining how worthless the skore is.  :)  

 

fmd3dFy.png 

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  • 2 weeks later...

Are the accounts charged off and not sold to collections or other words your credit report shows the original creditor with a balance and no associated collections account.

 

In this case it could be beneficial to try to settle those accounts for a good discount. However my main focus would be towards your overall finances and not defaulting on accounts that are currently in good standing. If you could afford to pay 50-60% your charged off debts you probably would have used that to pay down the balances on open accounts.

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On 4/23/2021 at 12:27 PM, MidnightBluJ said:

Well, legitimate services usually rank it between 600 to 650.

 

Still have no clear answer here.

 

If you have closed revolving accounts that are current and with the original creditor (not charged off), then the utilization on those accounts is hurting your scores (balance of $X but a credit limit of $0), but paying down/paying off the balances will help. 

 

The extent to which this will help depends on what and how many other negatives you also have reporting.

 

If you have closed accounts that went delinquent and are charged off, paying them won't help your FICO scores.

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