Tashinawin

My credit reports don't show my first cards.  I've had credit since 1976 and my  credit reports only show about 10-15 years.

 My understanding is that it will always show "0" balance if you took a charge off (settlement for less than the original amount) and it was reported to your credit report companies. However, that does not mean that it won't have a negative effect on your credit score.   I believe it still shows the amount owed if it goes into collections and is not resolved with the original company or the collections agency does not report your repayment correctly.

Unfortunately, I'd have to agree that Equifax is a hard case.  I had a situation where I had a missed CC payment.  It was turned over to collections. The bank that originally sent it to collections got bought out by a larger bank.   In the mean time, I had paid off the debt.  However, the original bank turned over records to the larger bank showing that I still owed the debt.  This happened two more times within the space of 2 years while I was trying to correct the problem with the credit reporting agencies.  Each bank reported it as a delinquent account that had been turned over to collections.  And each time one bank took over the other, they closed that account and opened a new one under the new bank's name.  This had the effect of "restarting" the 7 year period that negative reports stay on your credit report. I sent countless copies of the statements, receipts, bills, etc. to each new bank and filed a report with the credit bureaus.  The credit reporting bureaus then had to "verify" the information with the previous bank which was no longer in existence.   So the Catch-22 continued indefinitely until one bank held on to the account for a few years and it finally disappeared.

I think your your mortgage company is probably right.  Having a 30/70 ratio of used/unused credit brings better return to a credit card company than a 10/90 ratio.  They WANT you to keep a continuous balance as long as you keep making your monthly minimum payments, up to the maximum point where statistically you are not likely to default.  They maximize profit that way.   I would say it's optimum for you as an *individual* to keep your balances below 10%.  That way you are carrying enough of a balance to keep the credit card companies interested, but not so much that you are paying a whole lot of interest and accruing more debt than you can reasonably pay off in the case of an emergency.

Generally credit card companies won't delete the information from your credit report if it goes into collection, even if you settle with them.  Some of those debt consolidation companies don't tell you that, since they collect a fee for handling the consolidation.   The results would be the same if you hired a personal attorney to negotiate with them for a charge off /paydown plan.  it would be nice if you could actually negotiate a settlement with them directly, but Credit card companies don't like to negotiate with individuals.  At least not when it comes to charging off debt.   Your score will improve gradually as it ages and you make regular payments. In my experience, it improves most after the first 3 years, and after 5 years or so you probably won't notice its effect.    If you claim  Chapter 7 bankruptcy, it will stay on your credit report for 10 years.  However, by about year 7 or 8 you won't see any appreciable difference in your credit score, and some credit rating bureaus don't even list anymore.

The 7.5% rate is good, but as others have said, the $45 fee for 2 years would offset any interest you save.  Also, if it is a variable rate, you could get stuck paying higher interest in the future, which is a very likely possibility given how things are going.