04-25-2012 06:10 PM
I had a utility bill that was sold to another creditor (ICC). I paid ICC two years ago but I notice they are reporting it as a (CO) chargoff on all three reports. Are they allowed to do this? It seems as though the only creditor would be able to say it was a charge off but I'm not sure. Any advice?
04-25-2012 06:58 PM
Do you have proof that it was paid? I'd maybe send them a letter reminding them that it was paid and asking them if they could just remove it.
04-26-2012 05:52 AM
Was your payment for less than the full amount of the debt?
If you settle for less, the debt is, from the consumer's perspective, paid. No more debt.
But the owner of the debt has to deal with the formerly collectible asset of the entire debt in their accounting ledger.
Accepting less than the full amount requires them to account for the difference. No longer a receivable asset, so it is a loss.
I see nothing improper in accounting for the loss by reporting it as such, and obtaining a tax benefit for the loss.
However, if you paid in full prior to their doing a charge-off, that is a no-no, as their would have been no delinquent debt at the time of their charge-off of that asset.
Unfortunate that they choose to report their accounting to the CRA, as I agree that is a bit chinsy, but I dont see any prohibition against it.
I have a problem with the reporting of any charge-off to a CRA as a black-mark against a consumer, as it is an accounting measure that does not relate to what the consumer still owes or ultimately pays, but the fact is that a charge-off is reportable.
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO