120 Past Due/ $0 Balance

[brookenichole]

Hi All,

I am new here and have a question. My husband and I are currently trying to improve his credit scores and are signed up with myfico.com. My question is: He was late/delinquent on 4 of his student loans totaling about $25k all together. Those loans were then transferred to another servicer and are now owned by them. The problem is, on his EX report, the status on those loans that were transferred is "transferred, closed" with a $0 balance on all 4- EX hold his highest score.

However, on his EQ report, the status on those loans is showing "120 + Days Past Due" status with a $0 balance for all 4 loans. And his TU report is showing a "payment after charge off/collection" with a $0 balance for all 4 loans. These loans were transferred to another servicer...not to a collection. However, the current servicer now has these loans in collection and that is appearing on all 3 reports. We are in a rehabilitation program for the loans now and we do know that the current servicer is reporting accurately, the status and balances of each.

Our question is whether EX and TU are reporting the pre-transferred loans accurately? If they have been transferred and now hold a $0 balance- shouldn't both bureaus be reporting as such...as they are now closed due to a transfer? EX seems to be reporting it correctly and curious if that is why his score with them is higher as the status's on the other bureaus is hurting his scores there?

ANY COMMENTS WELCOME! Thank you so much for reading!

[AndySoCal]

See if you can work with the lender who is reporting this information to have them correct it. You may wnat to find the paperwork showing these loans were tranasferred just in case. If they wont help you then dispute it with each bureau and submit the paperwork as proof it was transferred and a chargeoff. Also dispute 120 day late with a zero balance as incorrect reporting.

[RobertEG]

There is nothing inherently incorrect in reporting of an account as having a status of 120 days delinquent at the time of reporting, and also having a $0 debt balance.

If an account is in arrears at the time the creditor chooses to sell it, that is a fact.  There is no requirement to delete accurate reporting of prior delinquencies based on subsequent satisfaction or sale of the debt.

If sold, the creditor is required to timely update their reporting to show $0 debt still owed to them.  A dispute can compel them to correct this inaccuracy, but wont compel them to delete any accurate reporting.  It's housecleaning.

[tmobileguy]

I would disagree, at the point the OC sold the account it would not be 120 days late anymore since the account would be settled for less (since it was purchased by someone else and they no longer have a right to collect on it anymore) so the balance would $0 and the amount owed to them would not be 120 days late anymore (the account was settled and thus paid in full for less)...their last reporting could be 120 days late but the next reporting must either be "paid as agreed" or "sold/closed/charged off" or something along those lines...not a "120 days late" as would be reported with an account they still owned...because if they don't own it, then its not late (to them) anymore....

[RobertEG]

Reporting of a late is not based on future acts, it is based on past acts. 

A debt sold to another is not "settled" with the consumer, and the debt remains unsatisfied.  Reporting of a $0 balance does not equate to satisfaction of a debt.  It equates to what is currently owed to the reporting party.

Its payment status at the time the creditor sold the account is accurate and legitimate reporting that is not required to be deleted based on subsequent payment or debt status.

My opinion.  If you disagree, then file a dispute and make the argument with the furnisher.

[brookenichole]

We are not trying to remove the past reporting, although that would be nice rather, confused by the "current status" of both TU and EX. As my OP said, they differ, in addition, EQ is reporting as "transferred, closed" in the current status and under payment history, you can still find the delinquent payments. It's the current status that seems off to me, as they are current now closed with that servicer. Why would EQ report the current status as "transferred, closed" then?

I guess disputing with the bureaus won't do any harm. Either way, one of the two are incorrect in the status: whether it be "transferred,closed" "120 days past due" or "payment after charge off/collection." Something's not right...

Thanks all for input!

[AndySoCal]

Roberteg,

You cannot be currently 120 days  late with a zero balance it is impossible.

[RobertEG]

True as to current status, but not true as to payment rating status, which continues to record the highest level of prior account delinquency before whatever its currrent snapshot status might be, or recordation of the delinquency under the account payment history.

A dispute over the current status might result in update on their part of the current status, but would not require deletion of the fact of the delinquency and its level.

More a matter of housekeeping than substance.