Open Vs. Closed Charged-off Accounts.

[Amiashu12]

Hi Everyone. I need some as advice on some of these accounts. I have 4 open and 4 closed Charged-off accounts. open accounts: afni for $402,Easternaccos for $400,Mer&Pro for $2597, and portofolio Rc for $762. Closed accounts: Amex for $2053,Chase card for $728, Citi for $3233, Pioneer for $1108 and American Honda auto loan for $4293. How do i tackle this. What should I do that will give me a nice bump on fico Scores. Also, my experian score went down 5 pts and the reason was amex card balance decreased. Is that possibe?

[RobertEG]

First, the use of the term Open and Closed have very different meanings for accounts with creditors and collections.

With respect to creditor accounts, Open means that the account continues to be available to the consumer for use under the regular terms of the account agreement.

Closed refers to the termination of ability of the consumer to continue regular use of the account by adding more debt, and has practical meaning for revolving accounts.

With respect to collections, Open means the debt collector continues to have active collection authority and the debt remains unpaid.

Closed means termination of active collection on the debt, such as due to cancellation of assigned collection authority, sale of the debt to another party, or discharge of the debt.

A creditor will rarely, if ever, leave a revolving account open to further charges (additonal debt) if the account has reached the stage of being charged-off.

If a credit card, for example, still shows as an open account after a charge-off, it is almost always a simple failure to have reported the updated status of closed.

If you were to walk into a store and attempt to use the card, it would almost certainly be rejected.

A collection status of open or closed is normally unrelated to whether or not the debt has been charged-off, as the charge-off is usually taken by the creditor prior to referral or sale of the debt to the debt collector.

Paying a debt that was previously charged-off or reported as a collection does not negate the negative effect of the reported CO or collection.

The usual procedure is to make an offer to the reporting party to delete their negative reporting as a condition for your agreement to then pay the debt.

PFD offers are made to the creditor, in the case of their reporting of a charge-off, or to the debt collector, in the case of seeking deletion of their reported collection.

You can also first pay the debt, and then request a good-will deletion after payment.  However, you loose the offered incentive of $$ if you pay withut first obtaining their agreement to delete.

[RobertEG]

First, the use of the term Open and Closed have very different meanings for accounts with creditors and collections.

With respect to creditor accounts, Open means that the account continues to be available to the consumer for use under the regular terms of the account agreement.

Closed refers to the termination of ability of the consumer to continue regular use of the account by adding more debt, and has practical meaning for revolving accounts.

With respect to collections, Open means the debt collector continues to have active collection authority and the debt remains unpaid.

Closed means termination of active collection on the debt, such as due to cancellation of assigned collection authority, sale of the debt to another party, or discharge of the debt.

A creditor will rarely, if ever, leave a revolving account open to further charges (additonal debt) if the account has reached the stage of being charged-off.

If a credit card, for example, still shows as an open account after a charge-off, it is almost always a simple failure to have reported the updated status of closed.

If you were to walk into a store and attempt to use the card, it would almost certainly be rejected.

A collection status of open or closed is normally unrelated to whether or not the debt has been charged-off, as the charge-off is usually taken by the creditor prior to referral or sale of the debt to the debt collector.

Paying a debt that was previously charged-off or reported as a collection does not negate the negative effect of the reported CO or collection.

The usual procedure is to make an offer to the reporting party to delete their negative reporting as a condition for your agreement to then pay the debt.

PFD offers are made to the creditor, in the case of their reporting of a charge-off, or to the debt collector, in the case of seeking deletion of their reported collection.

You can also first pay the debt, and then request a good-will deletion after payment.  However, you loose the offered incentive of $$ if you pay withut first obtaining their agreement to delete.