Closed account reporting balance ??

Anonymous · ‎01-12-2018

So I have a macy's card reporting to TU & EXP but not EQ.

It says closed & charged off and under company it says "sold".

It's reporting a starting balance $0 and a current balance of around $400. I opened a dispute because it didn't make any sense to me and it's making my credit usage to over 100%. On EQ my credit usage is 1% because it's only my authorized user accounts. I have no open credit cards (I somehow just got approved for my first so it's not reporting) so I don't understand how my utilization is over 100%. Did I do the right thing by opening a dispute ? Mind you they're the only account still updating everything else hasn't updated since 2015.. and everything is to fall off in spring of 2019.

RobertEG · ‎01-12-2018

The account status of either open or closed is not relevant to the issue of either the current balance of the continued reporting of derogs, such as monthly delinquencies or a charge-off.

A creditor closes a revolving account in order to stem further damage by increased debt balance on an already delinquent account.

Closing does not negate the debt (current balance) or preclude reporting of additional delinquencies.

Thus, account closure is not per se basis for update of the current balance to $0.

It means that you attempt to use the card, it will be rejected.

The current balance must be updated to $0 if the consumer pays the debt, or if the creditor sells the debt.

If the creditor has reported the debt to be sold, then the continued reporting of a balance is contradictory, and can be disputed.

However, the creditor can, if they have in fact sold the debt, simply update the current balance to $0. It will not require deletion of any reported derogs or of the account itself.

You can likely expect reporting of a collection by the new owner.

Anonymous · ‎01-13-2018

Okay thank u! I did open a dispute over the balance. If they report the balance $0 it would probably bump my score up alotttttt because all my debt is sooo old it wouldn't hurt as much. But with this balance being reported I am showing a 117% usage or something like that.. when in actuality I have no usage except a 1% on my authorized user card. So either they need to bump it back down to $0 balance or I have to pay it off even though it stays on til 2019.

Now that I've opened a dispute , hopefully they'll have to update it. About disputing my question is do they have to "verify the debt" during this dispute or do they just explain that they either sold the debt and are wrong or they still own the debt with no proof?

RobertEG · ‎01-14-2018

Yes, update of the debt balance to $0 on a sold debt will help your % util if the debt is revolving.

However, the debt itself is still out there in the ether, and the new owner can, at any time, report their collection on the debt.

Thus, any gain in scoring based on improved % util will more than be offset by addition of a collection if the debt remains unpaid.

Score improvement may be temporary.

Which leads to the clear advantage of preventing the addition of a new collection. It might be the ideal time to contact the new owner, if you know who they are, and make a pay for not reporting offer to provent the reporting of a collection.