$0 Balance Car Loan Charge Off with Late Payments

[CJ1985]

Hi All. 

I have a paid charge off with a $0 balance reporting on my report still from late 2010. There were consecutive 30/60/90 days lates that lead to the charge off still showing on the report. 

My question is this - will those lates fall off of the account/report and possibly boost my score? Or will nothing happen at all to the tradeline since it is closed? Any input welcome. Thanks. 

[RobertEG]

Each of the reported derogs will remain until they have reached their credit report exclusion dates, even though the debt was paid.

The monthly delinquencies must be excluded no later than 7 years from their respective dates of occurence.

They do not all become excluded based on the DOFD.

The reported charge-off will become excluded no later than 7 years plus 180 days from the date of your first delinquency on the OC account.

That is separate from the exclusion of the montly delinquencies;  however, 7 years plus 180 days from the first delinquency usually results in 7 years having also passed from the date of reported 30/60/90 lates, so by the time the charge-off becomes excluded, the monthly delinquencies should also have passed their respective exclusion dates.

Thereafter the account will be absent of derogs.

[Anonymous]

---

@RobertEG wrote:

Each of the reported derogs will remain until they have reached their credit report exclusion dates, even though the debt was paid.

The monthly delinquencies must be excluded no later than 7 years from their respective dates of occurence.

They do not all become excluded based on the DOFD.

The reported charge-off will become excluded no later than 7 years plus 180 days from the date of your first delinquency on the OC account.

That is separate from the exclusion of the montly delinquencies;  however, 7 years plus 180 days from the first delinquency usually results in 7 years having also passed from the date of reported 30/60/90 lates, so by the time the charge-off becomes excluded, the monthly delinquencies should also have passed their respective exclusion dates.

Thereafter the account will be absent of derogs.

---

Or the entire account may be excluded along with the CO - either may happen. If you're lucky it will remain on your reports with no derogs until ten years from closing.

[RobertEG]

As I understand CRA policy on charge-offs, if the account is not delinquent when the exclusion period for the Co arrives, they exclude only the CO.

However, if the account remains delinquent, then when the exclusion period arrives, they exclude the entire OC account, as the showing of a remaining balance indicates an adverse item of information, which has its own exclusion requirment under section 605(a)(5).

Exclusion of the entire account thus avoids any issue of continued showing of adverse reporting, and is consistent with the exclusion of "an account" provision of section 605(a)(4) for charge-offs that are still derogatory.

Since the account is paid, then only the CO would likely become excluded, not the entire account.

[Anonymous]

---

@RobertEG wrote:

As I understand CRA policy on charge-offs, if the account is not delinquent when the exclusion period for the Co arrives, they exclude only the CO.

However, if the account remains delinquent, then when the exclusion period arrives, they exclude the entire OC account, as the showing of a remaining balance indicates an adverse item of information, which has its own exclusion requirment under section 605(a)(5).

Exclusion of the entire account thus avoids any issue of continued showing of adverse reporting, and is consistent with the exclusion of "an account" provision of section 605(a)(4) for charge-offs that are still derogatory.

Since the account is paid, then only the CO would likely become excluded, not the entire account.

---

Thanks for the clarification - I know it can go either way, just wasn't sure how the CRA's decide which way to go.