Is there a Credit Baseline for Scores??

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fire228
 
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Is there a Credit Baseline for Scores??

Postby fire228 » Wed May 18, 2016 4:20 am

Is there a credit baseline for scores or how does it all work??

For example, If you payoff a credit card you get so many points or if you have 2 late payments you decrease so many points, if you have a hard inquiry you decrease so many points, etc

Just asking because I have 3 credit cards that went into a "Charge Off" state after 4-5 late payments. The balances are around $600 for each card and I now have the funds to pay them off, but how much on average would it help? What defines how it would help? Should I pay it in full or pay a settlement for less?


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PhillyPhoto
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Re: Is there a Credit Baseline for Scores??

Postby PhillyPhoto » Wed May 18, 2016 10:06 am

There isn't a point number per item like you're thinking. A late payment to a person with only 1 credit card is going to drop more than a person with 5 because you failed your obligations on 100% of your accounts vs. 20%. If you have 3 that went 4-5 months behind, and can pay them off now, that's better to do than wait until any kind of reduced amount comes around. It will just sit there longer on your account as not being paid which will make things worse. I had a CC that was like that a decade or so ago, and ended up doing a settlement, but it did show up my your credit report as "paid - less than full", but I'm not sure of how that affects the score and how others view your history.

A score isn't the be-all end-all to your credit history, your full report is. The score if just a quick baseline you can look to. You're more than likely not going to be able to get any new cards for at least a year after paying your currently charged off accounts, if that's your goal. So, the sooner you take care of it, the sooner your score will rebound.
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TXviking
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Re: Is there a Credit Baseline for Scores??

Postby TXviking » Wed May 18, 2016 1:35 pm

If I were in your shoes, I'd try to negotiate a pay-for-delete, where the creditor agrees in advance to remove the derogatory entry from your credit report in exchange for payment in full. Note that not all creditors will agree to this, but it's worth asking.

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Re: Is there a Credit Baseline for Scores??

Postby takeshi » Wed May 18, 2016 3:08 pm

fire228 wrote:For example, If you payoff a credit card you get so many points or if you have 2 late payments you decrease so many points, if you have a hard inquiry you decrease so many points, etc.

No, the scoring models aren't quite so straightforward. For FICO scoring:
http://www.myfico.com/crediteducation/w ... score.aspx

The impact of a given change will depend a bit on your credit profile.

fire228 wrote:Just asking because I have 3 credit cards that went into a "Charge Off" state after 4-5 late payments. The balances are around $600 for each card and I now have the funds to pay them off, but how much on average would it help? What defines how it would help? Should I pay it in full or pay a settlement for less?

Paying won't help much, if any. You want removal and you want all of them removed. Carefully research before taking any action as it is possible in some cases to make matters worse. There are many resources out there on how to deal with collections.

Derogs like collections impact Payment History (see the link I provided) and tend to have a significant impact as long as you have any on your reports. That's why you want removal of all of them. A single derog will hold you back. It's not just about scores or approvals but also the terms that you stand to qualify for.

fire228 wrote:Is there a credit baseline for scores or how does it all work??

There are many scoring models used by creditors out there and they evaluate report data differently. The link I posted is a general guide for typical weights for FICO scoring. However, even FICO models don't all weigh report data identically or have the same scoring ranges. On top of that, while most creditors use a FICO model, not all do.

Additionally score is just one consideration that a creditor will use in making its decision. The creditor/product has underwriting criteria that are not accounted for by a credit score. Your entire credit profile will be considered against the underwriting criteria to determine approval, limit, rate, etc.

fire228
 
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Re: Is there a Credit Baseline for Scores??

Postby fire228 » Thu May 19, 2016 6:23 am

Luckily these 3 credit cards are the only negative things on my credit report. My vehicle was in a similar situation and I was behind about 6 payments and it went to a Charge Off state as well. I called and paid my balance in full and they updated my account to Paid charge off and a month later my score went up 30 points.

My credit cards are all from Capital One and I have asked before that if I paid the balance would they remove the negative remarks and such and I was told no but they would update everything to Paid charge off....Is that a good thing or should I ask again for it to be removed? Also, am I asking for the entire account to be removed? Just the Negative remarks? What?

And should I try to pay a settlement for less than the balance or just pay it in full?

Thanks in Advance!!

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Re: Is there a Credit Baseline for Scores??

Postby thom02099 » Thu May 19, 2016 11:49 am

fire228 wrote:Luckily these 3 credit cards are the only negative things on my credit report. My vehicle was in a similar situation and I was behind about 6 payments and it went to a Charge Off state as well. I called and paid my balance in full and they updated my account to Paid charge off and a month later my score went up 30 points.

My credit cards are all from Capital One and I have asked before that if I paid the balance would they remove the negative remarks and such and I was told no but they would update everything to Paid charge off....Is that a good thing or should I ask again for it to be removed? Also, am I asking for the entire account to be removed? Just the Negative remarks? What?

And should I try to pay a settlement for less than the balance or just pay it in full?

Thanks in Advance!!


If you do a Google search on "capital one pay for delete success", you'll find a wide variety of success stories, and some not so successful. Getting some sort of documentation from Capital One is important. Fax them a pay for delete letter, asking someone to sign it and fax it back to you (as noted in several of the responses to your Google search). Since you stated that you have the funds to pay them in full, it may be advantageous to do so; they may be more willing to PFD with a full payment versus a negotiated payment. Your call on that. Having the information deleted versus a paid charge off may likely result in a better score increase, and will look better on your reports for manual underwriting.
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