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I believe I've read that charge offs have to be paid, correct?
I have 2 COs with HSBC now C1. Drop off dates are 6/2015 and 8/2015. Both are reporting a zero balance. They will not accept pmt as they do not own the debt.
But, they are not paid.
The CA (***not reporting either TL on any CR***) does own the debt BUT has closed the accounts on their end and will not accept payment since they are closed (I have talked to them and they have confirmed this).
So, CO reports 0 balance and the CA lists the accounts in their system as closed.
How will this play out in the mortgage process? Since there is no CA reporting and it's a 0 on OC will they assume it's paid and not question it?
Every situation is different.
Having Charge Offs does not necessarily mean they have to be paid. It is based on Lender qualifications, and UW decision.
In your peticular situation with the debt reading $0 even with a Charge Off being stated, it is most likely not going to play a factor except for in your FICO scores.
I see no reasons to worry at this point in time.
@MovingForward_2012 wrote:
If neither the original creditor nor the CA will accept payments and the debt has not been sold, you could send a debt valid letter. If they can't verify the debt, it must be deleted. I have never heard of an unpaid collection not being able to be paid at all because all debt holders have closed the account and aren't taking any payments. It sounds like the original creditor should delete it from your reports. I'm sorry but that is very strange to me. You could also GW them and ask for deletion since you not being allowed to pay, constitutes that debt is satisfied.
With some lenders, if your score is above borderline, you can have 1 unpaid collection or charge off or late payment. I have 1 unpaid collection that doesn't have to be paid. My LO told me it was because of my credit score. If my credit score was lower, he said I probably would have to repay it.
Why would I DV the CA when they are not reporting to any bureau and not attempting to collect a debt?
Portfolio is the CA and I disputed the TLs a few years ago (reporting inaccurately) and it was at that time they sent me a letter that they reviewed my dispute found I was correct and were deleting the TLs and ceasing collections. I called them again a few months ago and was told that the accounts were closed in their system. So while it may sound strange, I have verified it with them.
I doubt Cap1 will be moved to delete, I really don't care to point out to them "hey the CA you hired won't collect so delete my TL please" then have them somehow tell the CA to re-sell or whatever. And since the debt IS w/in SOL and reporting timeframes I REALLLLLY do not want to contact Cap1 about it again :-)
@JM-AM wrote:Every situation is different.
Having Charge Offs does not necessarily mean they have to be paid. It is based on Lender qualifications, and UW decision.
In your peticular situation with the debt reading $0 even with a Charge Off being stated, it is most likely not going to play a factor except for in your FICO scores.
I see no reasons to worry at this point in time.
Thanks, I was hoping it wouldn't be an issue!
Each lender is a little different but it should not be a problem at all, especially since they show a $0 balance.
I was approved for an FHA loan and my report looked like this...
All those $0 with negative indicators were charge offs and the two with balances were with collection agencies, still wasn't a problem. My credit score was 662 with this report.
They have now actually all fallen off due to being 7+ years old, my report now looks like this and my score went up to 701.
I can't wait till 2 of charge offs fall off, got a couple more years.
I filed BK in 2003, and had 2 charge offs later.
When I got my approval, my BK was still reporting on my credit.
After my approval, the BK fell off my reports. drop a few points too.