cancel
Showing results for 
Search instead for 
Did you mean: 

Negative balance checking account written off at Charles Schwab - credit implications

tag
creditmeister
Valued Member

Negative balance checking account written off at Charles Schwab - credit implications

Last year I was in the process of consolidating my banking accounts with my wife, and I forgot that my old Schwab checking account was autopaying a small bill every month. Eventually, the account went into the red and I got hit with a number of overdraft fees, putting the account balance into the red.


I called the bank to see what could be done. The customer service rep said that their charge off department had already written it off, and that if I want, I can send in the balance (about $50) to payoff the negative balance and the account would be active again. I would have to mail a cashier's check to Schwab's chargeoff department. The write-off happened in October 2015. 

 

My latest credit report on myFICo is from March 2016 (TransUnion) doesn't have any mention of this account. Nothing about collections or anything; in fact, my score has gone UP from December. 

 

What should I do? Is it worth pursuing this and paying the negative balance? Or could that just open up more problems and potentially hurt my score?

 

Thanks.

 

 

Message 1 of 9
8 REPLIES 8
Anonymous
Not applicable

Re: Negative balance checking account written off at Charles Schwab - credit implications

I would totally mail them the requested cashier's check immediately, and ask for verification that the account is now at a zero balance.

Closed or reopened, either way, depending on what you want to do with it.

 

While it may never show up on your credit report (they do not have to report it, after all, but they can send it to collectors in the future who might) and may therefore never have a quantifiable effect on your score, it will almost certainly appear in your banking history (i.e., Chexsystems) which can affect your ability to get bank accounts in the future even if you have good credit.

 

$50 for a clear history and peace of mind is more than worth it, to me.

Message 2 of 9
RonM21
Valued Contributor

Re: Negative balance checking account written off at Charles Schwab - credit implications

Yeah I would contact asap about getting it brought to current. The goal here is to prevent it from hitting your credit report. So any more time that goes by raises the risk of that happening and causing another problem.


Total CL: $321.7kUTL: 2%AAoA: 7.0yrsBaddies: 0Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping

BoA-55k | NFCU-45k | AMEX-42k | DISC-40.6k | PENFED-38.4k | LOWES-35k | ALLIANT-25k | CITI-15.7k | BARCLAYS-15k | CHASE-10k

Message 3 of 9
creditmeister
Valued Member

Re: Negative balance checking account written off at Charles Schwab - credit implications

I got worried on the phone because the rep was like "It could affect your credit..." but it hasn't shown up yet. He said it hasn't been sent to collections; it was written off by the bank. What does that mean from a CR standpoint?

 

Is there anything else I need to do to ensure it won't hit my credit report, other than just mailing the check like they requested?  I want to do as you've both suggested and PIF to make sure this is taken care of.

 

Thanks

Message 4 of 9
dave36021
Regular Contributor

Re: Negative balance checking account written off at Charles Schwab - credit implications

I would def pay them,especially if it is not on your CR yet. Have you checked your Chex Systems report as they may have reported it there and could hurt if you try to open another checking or savings account somewhere.

Back In the Garden since 6/5/2016

My Fico Scores: EQ:639 EX:665 TU:651


AU: Comenity/Bealls FL 930; Capital One 300 ;
Message 5 of 9
Anonymous
Not applicable

Re: Negative balance checking account written off at Charles Schwab - credit implications

Yeah I would pay it as soon as you can, save the problems that could come from it having a delay of payment

Message 6 of 9
RobertEG
Legendary Contributor

Re: Negative balance checking account written off at Charles Schwab - credit implications

The bank can, at any time, do one of four things that would affect your scoring.

They could choose to report the charge-off to the CRAs.  Perhaps someone here in the forum has knowledge as to whether Schwab has a credit reporting agreement with the CRAs,

They could also refer the debt to a debt collector for collection assistance, which would then permit the debt collector to report their collection, apart from whether the OC reports.

They could recoup a bit more of their loss by selling the bad debt, which would then similarly permit the new owner to report a collection.

Finally, they can bring civil action, seeking a judgment.  That is not highly likely in view of the small amount of the debt, but not outside the realm of possiblitiy.

 

I would suggest paying.... yesterday.

 

Message 7 of 9
creditmeister
Valued Member

Re: Negative balance checking account written off at Charles Schwab - credit implications

Thank you all for the input and scaring the heck out of me.  Smiley Happy
I'm running to the post office to mail out a money order to clear the balance right now, certified mail. 

 

Message 8 of 9
fishbjc
Senior Contributor

Re: Negative balance checking account written off at Charles Schwab - credit implications

Good Plan!  For a measly $50....well worth it!  Get that pay off letter and hang onto it.

 

Check CHEXSYSTEMS to find out if they've reported you!

Message 9 of 9
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.