Account closed and now open

Anonymous · ‎04-22-2016

I have recently disputed a charged off account in Mar 2013. It has not been reporting but has been verified and now showing open but as a charge off which doesnt make sense. My credit report here and Credit Karma shows the account as open the past 2 months on Equifax and Transunion but closed on Experian. It seems it shows open while in dispute but then closes after the investigation is complete. Is this the case? Is it just showing open while it is investigated?

RobertEG · ‎04-23-2016

I presume it is a revolving account? Otherwise, open/closed really has no signricance.

Closed means the creditor has termianted your ability to make more charges on the account.

Charge-offs are taken on severely delinquent debts.

Few if any creditors will keep a revolving account open to futher charges once it has reached that state of delinquency.

I am certain that if you went into a store and tried to use the card, it would be rejected.

It most likely should be updated to closed.

However, it is a simple correction, and wont resutl in any requirment to delete any other reporting.

If you wish to dispute, you can do so, but I would wait until the account is paid before bothering with such an insignificant administrative issue.

Anonymous · ‎04-23-2016

Should the balance be considered in my utilization? If it is a charge off, should the balnce report as $0 or is that only if it was sold to collections?

Imperfectfuture · ‎04-23-2016

@Anonymous wrote:
Should the balance be considered in my utilization? If it is a charge off, should the balnce report as $0 or is that only if it was sold to collections?

If it is sold to collections, then the balance should report to 0. If the creditor keeps the account (had two that did not sell until it fell off report) then they report the balance. Either way, any balance is counted in utilization, if initial creditor identified as revolving. Some CA's do not. But the usual suspects, PRA and Midland, report as open accounts, and will count in utilization.

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RobertEG · ‎04-23-2016

Reporting of a CO is simply their making of record the fact that they took that accounting measure.

A CO does not relieve the consumer of a penny of the debt, and does not require update of the balance to $0 or from continued inclusion in your % util if it is a revolving debt.

Update by a creditor to show $0 balance is required if the debt is paid for sold.

Anonymous · ‎04-23-2016

It'll only show a $0 balance if it was sold. The charge off status is just to say the lender wrote it off their books as it was no longer an asset (or something to that effect) but the balance is still owed as it wasn't sold to collections. Is this from a credit card? If so it could be factoring into utilization but if not it probably isn't. What was the basis of your dispute?

Imperfectfuture · ‎04-23-2016

@Anonymous wrote:
It'll only show a $0 balance if it was sold. The charge off status is just to say the lender wrote it off their books as it was no longer an asset (or something to that effect) but the balance is still owed as it wasn't sold to collections. Is this from a credit card? If so it could be factoring into utilization but if not it probably isn't. What was the basis of your dispute?

This is not always the case. On TU, had account sold, and both reported the balance. It was a repo, albeit illegal. When I did my dispute, they removed the balance, and removed the repo designation, dispute was with original creditor (see, I only do legitimate disputes ). My utilization lowered, even though it was an installment loan.

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Anonymous · ‎04-23-2016

Oh well I had an installment loan charged off in Jan/Feb 2014 and it wasn't sold so it showed the balance but never factored into my util that I could tell. I recently paid it and there was no significant score increase which furthered my thinking that it wasn't affecting my util. But I guess it's different for everyone. Idk if maybe the CRA reporting played a factor since mine was reporting to EX and EQ, not TU, but that's probably not relevant.

RobertEG · ‎04-23-2016

Percent util only refers to the amount of your discretionary limit on a revolving account that you are using.

Installment balances should not be included in your % util.

Installment accounts have a % remaining of original loan balance, which has very little effect on credit scorng.

Imperfectfuture · ‎04-23-2016

@RobertEG wrote:
Percent util only refers to the amount of your discretionary limit on a revolving account that you are using.
Installment balances should not be included in your % util.
Installment accounts have a % remaining of original loan balance, which has very little effect on credit scorng.

Mine did not, but this was from the golden age right before the bubble burst.

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