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Valued Member
bigboihill
Posts: 42
Registered: ‎04-09-2011

Proof of Paid Charge-Off

I will paste the post that I submitted in the understanding Fico scoring forum in red:

 

Hi everyone!  I have a question about the updating of a paid charge-off.  I have a charge-off on my CR from Barclays for the amount of 2,304.61.  Barclays still owns the debt but I paid it  off in full through their collection agent ARS.  I paid it in 4/2012.  I received a letter from ARS the following day after I PIF stating that the debt has been paid in full and that they will notify Barclays Bank.  However, my credit report has not updated yet!  The CR still shows a charge-off in the full amount without the paid status.  

 

Here's the big concern for me.  Barclay's has not updated my CR since July of 2009!  I am afraid if I contact them to have it updated, it will ding my scores because it will look more recent.  The charge-off is not really hurting my scores right now because I am at 690+ on all of my "true" FICO scores.  Also, I have the letter stating that it has been paid in full (which I plan on providing to an underwriter when I mortgage app in December).  I want your expert opinions on whether I should just leave it alone or force the issue on an updated status.  Thanks!

 

 

I am afraid that if I contact Barclay's to update the paid status, they will update the DOLA and it will hurt my score.  I am wondering if it is normal for an underwriter to demand the "0" balance be shown on the credit report even if I have documentation from the collection agency that the account has been paid in full.  Any insight would be great!  Thanks!

New Contributor
mrordinary
Posts: 72
Registered: ‎03-11-2012

Re: Proof of Paid Charge-Off

I am going to be in the same boat once my file gets to underwriting. Wait until they ask for proof paid. I would not bother the OC to update to paid unless the CO us affecting your utilization. This happened to me. I had to dispute to get the OC to update and my score increased due to the utilization dropping.

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Frequent Contributor
jasimae
Posts: 311
Registered: ‎07-18-2011

Re: Proof of Paid Charge-Off

It's the DOFD that you should be worried about, not the DOLA. 

Regular Contributor
igids1
Posts: 191
Registered: ‎07-05-2012

Re: Proof of Paid Charge-Off

Can you please elaborate on this? I am still trying to figure out what consists of 12 months of "clean history" for FHA. I have accounts that went delinquent in 2008-2010 and I just paid them off in June. So because they were "in collections" in june, do I have to wait until next June to have 12 clean months?

Contributor
jess985
Posts: 76
Registered: ‎05-01-2012

Re: Proof of Paid Charge-Off

I agree with Jasimae, its the DOFD you need to worry about, not the DOLA  if you're last collection was in 2010 then you have the 12 months of clean credit history needed. However the OP is worried that getting the OC to correct the balance on the CO will update the DOLA, causing his credit score to drop. I would be interested to hear what others have to say on this as well. Would proof that it has been paid be enough or do you need the credit reports to reflect a 0 balance?

Valued Member
bigboihill
Posts: 42
Registered: ‎04-09-2011

Re: Proof of Paid Charge-Off

bump

Valued Contributor
IOBA
Posts: 2,659
Registered: ‎08-13-2009

Re: Proof of Paid Charge-Off

bigboihill - keep yoru paid off letter in hand.  Does it specifically reference the Barclays cc account ending in xxxx?    Most underwriters can make the logic leap from your letter from ARS to Barclays chargeoff being paid.

 

As for Barclays, don't poke them unless you have to.   If you absolutely NEED to - underwriter says so - then you can maybe do a 3 way call and get verbal confirmation of the debt paid off.  Barclays is slow to update to the credit bureaus in my experience.

Valued Member
bigboihill
Posts: 42
Registered: ‎04-09-2011

Re: Proof of Paid Charge-Off


IOBA wrote:

bigboihill - keep yoru paid off letter in hand.  Does it specifically reference the Barclays cc account ending in xxxx?    Most underwriters can make the logic leap from your letter from ARS to Barclays chargeoff being paid.

 

As for Barclays, don't poke them unless you have to.   If you absolutely NEED to - underwriter says so - then you can maybe do a 3 way call and get verbal confirmation of the debt paid off.  Barclays is slow to update to the credit bureaus in my experience.


Thanks IOBA!  I actually called Barclays yesterday and spoke to a rep who stated that the account is showing paid in full on their end.  She stated that this has already been reported to the CRA.  I asked her to send me a letter stating such and she complied.  So now I will have a letter from the CA and the OC stating that the debt has been paid in full.  

 

The rep tried to get me to mail their credit dispute department, but I told her that I didn't have time to wait on mail correspondence (plus I don't want any dispute comments).  However, she did mention that she was creating a case about it because this is a problem.  So, I don't know what she meant by that statement.  I guess I'll have to wait and see if the CR updates.  Either way, I will have two letters stating that the debt has been paid in full!

Valued Member
bigboihill
Posts: 42
Registered: ‎04-09-2011

Re: Proof of Paid Charge-Off


jasimae wrote:

It's the DOFD that you should be worried about, not the DOLA. 

 

Thanks for your comment!  However, I am not concerned about the DOFD as I know that this won't change.  However, I was more concerned about the DOLA because if the DOLA is updated to reflect the more recent pay-off then my score may see a dip.  I have read stories on these forums that this was the case because the DOLA caused the scoring algorithms to look at the recent activity unfavorably for the charge-off if it had been several years since the charge-off had been reported.

 

Anyway, the opinions posted so far seem to suggest that it shouldn't affect my scores.  I guess I will just have to wait and see what happens!

 

Valued Contributor
IOBA
Posts: 2,659
Registered: ‎08-13-2009

Re: Proof of Paid Charge-Off

Keep us posted!  :smileyhappy:


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