CHARGE OFF STATUS

[Anonymous]

Hi,

I have some accounts that I have "settled in full"  with the original lender,but show simply as CHARGE OFF on the equifax report. Wow talking to equifax was a real challenge

(language barrier) but what I got from the rep is that even though the comments section shows settlement received, the credit score only looks at account status of CHARGE OFF. 

My question to you wise folks who have walked this road before me, what can I ask of the companies to change the status too? Am I screwed, or is there a way to polish this up? I am not sure what to ask? 

thanks

[RobertEG]

It is a matter of which deck chair it will end up sitting in rather than having it removed.

A charge-off is a reporitng by the creditor that they took that accounting measure.

Once taken, it becomes a fact that remains in your file. The issue is what cubby it resides in, not its removal.

When the account is delinquent, the current status is one of delinquency, either at the current monthly level of delinquency, or as a charge-off.

Howver, current status relfects only a snapshot of the status as of their last ("current") reporting.

If the account is paid, the current status MUST be updated  to Paid, and the prior delinquency status is moved over to a code called your payment rating, and of course the derogs are also recorded by their historical date of occurence under your Payment History Profile.

Thus, the currernt status should be updated to paid (or paid/settled for less), but the CO does not go away, and contnues to be included in your scorng.

What is the Current Status?

[Anonymous]

Thanks for your reply and help! These accounts were settled in full by the original account owners , but equifax says there is no other account status for me, they say charge -off is always a charge off. No other way to report. If this is true, I guess paying off debts after a company reports as "charge-off" is no help to repair credit/ minimize damage?

[Anonymous]

I Have contested the charge off status, that it should be updated to paid/ settled in full, but equifax refused to provide me with any evidence of the lenders response to my objection.

[Anonymous]

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@Anonymous wrote:
Thanks for your reply and help! These accounts were settled in full by the original account owners , but equifax says there is no other account status for me, they say charge -off is always a charge off. No other way to report. If this is true, I guess paying off debts after a company reports as "charge-off" is no help to repair credit/ minimize damage?

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It does not directly help improve scores, but the truth of the matter is that it's NOT "all about the score". Often you will be denied based on charge offs being unpaid, rather than paid. There was a person here recently complaining that he just could not get approved by Cap One despite having mid 600 scores, while others were getting approved with sub-600 scores. Then when he paid an old credit card charge off, suddenly he had Cap One approvals in his hand. Settling your debts goes a long way toward recovering, no matter the score impact (or lack thereof).

Remember - its not all about the score.

[RobertEG]

Once again, disputing "the charge-off status" is too vague.

The reported charge-off will remain in your credit report and contnue to be scored.

It is recorded now under the Payment Rating and Payment History Profile.

If you have a dispute, it would be of the Current Status still reporting a delinquency status, not a dispute of "the charge-off status."

You dont have an animal called a "charge-off status," you have a charge-off that can be a current status or can be a payment rating or payment history profile status.

It's semantics, not scoring substance.

[Anonymous]

Thnaks for your time helping me understand this confusing topic.  I can appriecate how the symantics play into this situation.

Equifax shows my account status as "Charge Off"   Even though I have settled in Full with them.  I was wondering if there was a way to change this to my benefit.

I am approx 50 points from a much better mtg rate, and trying to clean up and polish any angle possible.

[Anonymous]

"The negative account will contribute to your score until they come off of your report. They negative accounts will stay on your report for 7 years from the date they last reported."

This was the response from equifax when asked when does the 7 year period starts

I was of the understanding that the 7 yrs starts fron the date of first deliquency.   I ask this beacause equifax reports also the "date of major delinquency reported"  on my account that is 2 years after this account went delinquent.  I need to know if equifax is wrong here, thanks!

[RobertEG]

The exclusion of a charge-off or collection is clearly set under FCRA 605(a)(4) as clarified by FCRA 605(c) as being no later than 7 years plus 180 days from the date of first delinquency that immediately preceded the charge-off or collection activity.

The date of last activity, date of first major delinquency, or any other date, is not relevant.  It is based only on the reported DOFD.

[Anonymous]

Thnak you, you are an amazing help!!!!!!