So I got an alert from Experian the other day. I have a Credit One account from 2011 that was charged off for a balance of $400 and sold to Midland Funding. I paid Midland Funding back in March 2016. Now a full year later, the Midland Funding account is completely removed from my credit and now this charge off account from Credit One is reporting a negative payment for March 2017 and this dropped by score by like 24 points because its now a recent deragatory mark. How does this happen? I've started the process of disputing this with Credit One and they say it will take up to 30 days. In the process I also requested a goodwill effort to remove the account completely because I do not trust them going forward, just randomly activating an old charge off account that has been paid.
It depends upon how the account is reporting.
The creditor can report their account at any time, and their reporting can include the fact that it was charged-off at some point.
When you say that they reported a negative payment, do you mean that they reported in 2017 that the account was paid at some point, with monthly derogs continuing to be reporting up to that time?
The original Credit One account has been on my credit as a closed charged off account since 2011, showed no payment history and was just a closed charged off account. Says it was sold to another company. The company it was sold to was Midland Funding. I settled the account with Midland in March 2016. Midland collection account has since been removed from my credit. But now the original closed/charged off Credit One account is reporting a derogatroy/negative payment history for March 2017. Why is it reporting a negative payment/derogatory mark for March 2017 when this matter has been settled a full year ago?
When a creditor sells a delinquent debt to a debt collector, they almost always take a net loss.
While they get some reimbursement from the ability to write off the charged-off debt as a business loss and from the pennies on the dollar they obtain from the sale, those two are usually far less than the debt, and thus they have taken a net loss. If the consumer ultimately pays, the creditor does not get a penny of that payment.
There might still be reason in their mind to reinsert their account into the consumer's credit report after they have sold the debt.
They are not precluded from doing so, but if that reporting includes any payment history monthly delinquencies with dates after they sold the debt, that is inaccurate reporting.
You can dispute the accuracy of that reported delinquency.
However, that dispute will not compel any deletion of other accurate reporting, even if verified or corrected.
The major derog in the form of the charge-off is still proper, and will usually result in the same scoring impact as the major monthly delinquencies, so correction is unlikely to produce any significant scoring improvement.
I dont think youre understanding. This account has been on my credit, thats not the problem. The problem is that it is all of sudden reporting negative payment for March 2017 when it was settled in March of 2016. I dont have an issue with the account, it was fine just rotting away on my credit report. But now it is active and showing a deliquency for March 2017. Calls to Credit One, the account is archived and no one has access to it. How does this make any sense?
Yes, you can dispute a reported delinquency that has a month/year after the debt was discharged.
So an update on this. Got a letter from Credit One today saying the account was sold to MSW Capital and they are the ones to deal with. Few issues with this. I've never dealt with MSW Capital. The account was sent to Midland Funding for collections and the collection account was paid in March 2016. Second issue is that the reporting on my credit isn't coming from MSW Capital, it's coming from the original account with Credit One.
dispute the account with CB for reporting inaccurately.
credit one sold to msw who sold to midland (or someone who later sold to midland) thats why credit one is saying its with msw