12-28-2012 03:36 PM - edited 12-28-2012 03:40 PM
This is an GE CareCredit account I opened in 2006. It was settled with the lender (not sold) in 2008, but I had been excessively late a bunch of times and then settled in full with GE for less than the full balance. It had been reporting as a currently delinquent, and I've been bothering them about that for the past month. I just expected it to be changed to "Settled, Closed."
Today, it appears they have not only fixed the inaccuracy, but transformed the entire report to a Current account and eliminated all of the late payments? However, the remark remains, "Settled - less than full balance."
...is this still a baddie? Is there anything viewed as derogatory about this now?
Old - 12/27/2012 New - 12/28/2012
Account No.: **** ****
Condition: Paid Paid
Balance: $0 $0
Type: Charge account Credit Card
Pay Status: Late 120 Days Current
Past Due: $0 $0
High Balance: $1,761 $1,761
Terms: --- ---
Limit: $4,000 $4,000
Payment: $0 $0
Opened: 01/12/2006 01/12/2006
Reported: 12/03/2008 12/21/2012
Responsibility: Individual Individual
Remarks: Settled - less than full balance Settled - less than full balance
Late Payments (last 7 years):
30 Days Late: 7 0
60 Days Late: 4 0
90 Days Late: 3 0
12-28-2012 04:01 PM - edited 12-28-2012 04:02 PM
BTW, this was the most recent communication I sent...
To Whom It May Concern:
I did not authorize this hard inquiry, and this hard inquiry was performed under false pretenses as described in the clear language of the law [Fair Credit Reporting Act 15 USC § 1681b.]: "A consumer reporting agency may furnish a consumer report under the following circumstances and no other: (1) In response to the order of a court having jurisdiction to issue such an order, or a subpoena issued in connection with proceedings before a Federal grand jury. (2) In accordance with the written instructions of the consumer to whom it relates. (3) To a person which it has reason to believe-- (A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer; or (B) intends to use the information for employment purposes; or (C) intends to use the information in connection with the underwriting of insurance involving the consumer; or (D) intends to use the information in connection with a determination of the consumer's eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status; or (E) otherwise has a legitimate business need for the information in connection with a business transaction involving the consumer."
You are civilly liable to me for your willful violation of the law -- performing a "hard inquiry" on my Equifax file without my permission. According to the Fair Credit Reporting Act 15 USC § 1681n(a)(1)(B): "Any consumer reporting agency or user of information which willfully fails to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of--(1) any actual damages sustained by the consumer as a result of the failure; (2) such amount of punitive damages as the court may allow; and (3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court."
12-28-2012 04:05 PM
12-28-2012 04:10 PM - edited 12-28-2012 04:26 PM
Yes, this is still a derogatory account because of the notation "Settled - less than full balance". Any settlement will ding your FICO® score.
Right, my two other baddies are the same situation, but they say "Legally paid in full for less than the full balance" for "Payment Status" rather than "Paid or paying as agreed." And now my number of derogatory marks is listed as 2, rather than 3. It's only in the "Remarks/Comments" field that the settlement is noted.
So it appears there is nothing in the scoring algorithm that can detect this as a derogatory account from the "Remarks" field alone.
How does that play out with a lender? Everything reports as A-OK with this, but the remarks indicate otherwise...?
12-28-2012 04:26 PM
12-28-2012 04:36 PM
If it is not flagged as a negative account, I would say no. I think that the "current" notation is what is being used for scoring purposes, as well as the fact that the payment history is wiped clean. I would check your score and see if it changed. A manual review might draw questions, but as far as computerized scoring, it looks positive to me.
12-28-2012 04:37 PM
Are those comments from a FICO® score & report ? I would be surprised if this account was scored positively. I have always heard that settlement notations are a derogatory remark.
I have not checked on FICO yet. (This change just came through.) That was from TransUnion (Vantage Score).
But logically, how could FICO's brain figure this out? There are an unlimited number of phrases that could be in the "Remarks/Comments" field. Settlement notations are certainly a derogatory remark, but what counts as a "notation"? My other two old settlements note this in Payment Status. The difference here is that the Payment Status reads as current, and it is only in the Comments that this is mentioned. FICO uses a complicated algorithm, but does it really read the free-response comments?
I refreshed my report on Amex's CreditSecure (PLUS scores), and there is also no negative indicator on any of the fields there; it is only mentioned in the comments.
I cannot imagine that the content of the Remarks/Comments field is part of FICO's calculation. I am unsure whether lenders can see the comments, and if they can, how likely they are to actually read them. (And if they do, how they would view an account that appears to be 100% positive but has a comment that sounds negative.)
12-28-2012 04:50 PM
12-28-2012 05:01 PM
Well now I'm tempted to find out.
12-28-2012 05:14 PM
Ok I did it.
So... it is still flagged, BUT...
The jury is still out on whether it's flagged as a result of the Comment or this:
Unlike what transunion.com says (as I listed in the OP), FICO's TU report says --
30 days late - 0 times
60 days late - 0 times
90+ days late - 1 time (Dec 2006)