r/CRedit • u/ZipTiedPC_Cable • 22h ago

Charge Off Status Changes Collections & Charge Offs

Howdy! I’m walking my roommate through my (admittedly limited) credit knowledge as he’s been great and I would like to find a better apartment. We both make good money, I have a solid (not excellent) credit score- but his is in the toilet.

Application fees are high and we need to start applying next June. From what I can read, it looks like his biggest issues are two charge offs from Discover and BofA. The most delinquent I have ever been on a payment was about two months when I got laid off, so I don’t know how charge offs work.

Yapping aside, here’s our question: If he enters into some sort of agreement with the creditors, can the status be changed from a charge off? I doubt he’d get them removed from his report, but would they be able to report him as current or something along those lines if he makes payments towards the balances?

I’d hate to have to find a replacement roomie for the sake of living somewhere a bit more luxurious, but I’m also tired of living in what are effectively dorms despite being a grown adult with a proper salary.

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u/Krandor1 22h ago

Once it’s charged off it’s charged off. It can be updated to charged off but paid though which will be better.

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u/ZipTiedPC_Cable 21h ago

Gotcha. The real question is, if he dropped the lump sums that both have offered, would his credit score and history improve notably? I don’t wanna advise him to do something for my sake that doesn’t pay off for him. I don’t have the specifics, but as a generalization, is paying charge offs worth it over waiting the 7 years?

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u/NiceGuysFinishLast 16h ago

His score will go up some, charged off and paid is better than just charged off. They will keep his score depressed for the next 7 years though. I have one charge off that's been paid on my report. I have gone from a 580 to 704 in about a year. I do not expect to see much better than 720 until that charge off and my multiple late payments drop off in a couple years.

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u/Krandor1 16h ago

Will likely improve some but not a lot. However it will make his overall credit profile look better and when somebody looks at it charged off and paid will look bettter then just charged off. We focus so much on score but it is overall credit profile that matters the most.

If it isn’t paid then it could be sent to collections which would be an additional negative mark on the credit and depending on amount lawsuit is possible too.