Charge off accounts reporting

skidz · ‎03-14-2015

I have a charge off on my account. I want to verify if they are reporting my lates correctly. I had first 90 days late in June 2011. No payment on account uintil paid off 6/2013. Can a creditor put 90 days late every month until this is paid?

THis is the history they are reporting

22 times (Mar 2013, Feb 2013, Jan 2013, Dec 2012, Nov 2012, Oct 2012, Sep 2012, Aug 2012, Jul 2012, Jun 2012, May 2012, Apr 2012, Mar 2012, Feb 2012, Jan 2012, Dec 2011, Nov 2011, Oct 2011, Sep 2011, Aug 2011, Jul 2011, Jun 2011

Thank you

Anonymous · ‎03-14-2015

@skidz wrote:

I have a charge off on my account. I want to verify if they are reporting my lates correctly. I had first 90 days late in June 2011. No payment on account uintil paid off 6/2013. Can a creditor put 90 days late every month until this is paid?

THis is the history they are reporting

22 times (Mar 2013, Feb 2013, Jan 2013, Dec 2012, Nov 2012, Oct 2012, Sep 2012, Aug 2012, Jul 2012, Jun 2012, May 2012, Apr 2012, Mar 2012, Feb 2012, Jan 2012, Dec 2011, Nov 2011, Oct 2011, Sep 2011, Aug 2011, Jul 2011, Jun 2011

Thank you

So, if I'm understanding correctly, you didn't make a payment between March 2011 (resulting in your first 90 day late in June 2011) until you paid the full amount off almost two years later?

If this is correct, yes, they absolutely can report you 90 days late each of those months. The reporting in a given month is the snapshot of your account status at that point in time. Since no payment was made, you were technically 90 days late (and more) each of those months. I'm really surprised that you weren't charged of (that usually happens at the 180 day mark) or that you were never reported as being 120/150/180 days late.

skidz · ‎03-14-2015

it was charged off i think in 7/2011and I paid it after it was charged off. Can they report it that way after it is charged off? (COntinue to report 90 late) It may be reporting 120-150 i just dont see that on my report/.

Thanks

Anonymous · ‎03-14-2015

Yes, as long as the account was at least 90 days late for the month they reported, they can report it as such, even after it was charged off. After all, they have to accurately reflect the events that led up to the charge-off. The charge-off doesn't change that you were late. The only change to the OC's reporting should be the amount due (from whatever the balance was, to zero after they charged it off and sold the debt.)

A couple of things don't make sense here, though. First, 7/2011 is awfully early for a charge off if your first 90 day late was the month before (although I suppose not unheard of, since you'd technically be 120 days late at that point. Although 180 is the norm, I don't believe a creditor is legally obligated to wait 180 days.)

But more than that is, if they charged the account off (meaning they sold it to someone else to collect) in 2011, why are they reporting AFTER that date?

When you paid it off, did you pay it to the original company? Or, did you pay it to the collection agency? It almost sounds like this account wasn't charged off at all, but instead, the creditor closed your account, but kept the collection of it in-house, in which case, yes, they would still be within their rights to report those lates.

RobertEG · ‎03-14-2015

A charge-off does not mean that the debt was sold.

It is an accounting measure taken by a creditor when the determination has been made that the debt will not be paid.

It is an accouning action taken to shift the debt from a receivable asset over to a bad debt.

The debt still remains fully due, and delinquencies can continue to accrue.

Once a debt becomes delinquent, it can be reported as such each month. The creditor can continue to bill and incresse the level of delinquency each month.

Once they report a CO, many creditors will cease reporting of additional monthly delinquencies, but is not precluded from doing so.

Contesting their reporting is apt to cause the credtior to report the actual level of delinquency each month, and could in fact make things worse.

The debt is now charged-off, which is as bad as delinquency reporting gets with an OC.

Anonymous · ‎03-15-2015

@RobertEG wrote:
A charge-off does not mean that the debt was sold.
It is an accounting measure taken by a creditor when the determination has been made that the debt will not be paid.
It is an accouning action taken to shift the debt from a receivable asset over to a bad debt.

The debt still remains fully due, and delinquencies can continue to accrue.

Once a debt becomes delinquent, it can be reported as such each month. The creditor can continue to bill and incresse the level of delinquency each month.
Once they report a CO, many creditors will cease reporting of additional monthly delinquencies, but is not precluded from doing so.

Contesting their reporting is apt to cause the credtior to report the actual level of delinquency each month, and could in fact make things worse.
The debt is now charged-off, which is as bad as delinquency reporting gets with an OC.

That is true - I always equate charge off with being sold, since that's often what happens, but you are right, it describes only the accounting function. Thank you for correcting my misinformation!

gdale6 · ‎03-15-2015

@skidz wrote:
it was charged off i think in 7/2011and I paid it after it was charged off. Can they report it that way after it is charged off? (COntinue to report 90 late) It may be reporting 120-150 i just dont see that on my report/.

Thanks

No, once its paid off there is no late amount due... They can say Now paid, was 90 or something to that effect but reporting it currently past due is not kosher and I would send the creditor a Section 623 direct dispute.

Anonymous · ‎03-15-2015

@gdale6 wrote:
@skidz wrote:
it was charged off i think in 7/2011and I paid it after it was charged off. Can they report it that way after it is charged off? (COntinue to report 90 late) It may be reporting 120-150 i just dont see that on my report/.

Thanks
No, once its paid off there is no late amount due... They can say Now paid, was 90 or something to that effect but reporting it currently past due is not kosher and I would send the creditor a Section 623 direct dispute.

OP stated they didn't pay it off until 2013.

So, if the creditor charged it off but didn't sell to a CA, then they could well report as late for the two years between CO and PIF.

Anonymous · ‎03-15-2015

Skidz, the big question here I think it's when you paid off the debt, to whom did you pay it?

If you paid it to the original creditor, it means they still owned the debt and could report.

If you paid it to a different company, i.e., a collection agency, then you might have basis for a dispute. You would have to find out when the OC sold the debt to the CA; at that point, I believe the debt is no longer theirs (they basically sell it for pennies on the dollar to recoup some of their loss, but also give up the right to the entire amount.)

Also bear in mind that there are scenarios in which an OC charges off a debt and uses a CA to collect, but still retains ownership of the original amount. Student Loans through the Dept of Education is the most common example I can think of. In these scenarios, you might communicate and make arrangements with the CA, but you're writing the checks to the OC. So, in this case, the OC would continue to report until paid off.

Guys, please fill in the blanks and/or make corrections on any points I might have borked up.

RobertEG · ‎03-15-2015

Fair Isaac has not, to my knowledge, publicly released details on how it scores a debt that has both monthly delinquencies and a charge-off.

More specifically the issue is whether each monthly delinquency is separately scored, or whether the highest level of delinquency (in this case the CO) includes the impact of any lower levels of delinquency.

A reported CO must necessarily have incurred prior monthly delinquencies, reported or not.

It would make sense to me that a reported CO would include, when scoring its impact, any and all reported or unreported levels of monthly delinquencies, thus rendering moot the issue of what other monthlies were reported. But that is just my speculation.

I would be interested to see a reference to any published disclosure by Fair Isaac on how they handle lower levels of delinquencies once a CO is reported.....