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08-18-2011 11:23 AM
I've been paying a lot of attention to my credit report lately as I want to buy a new house (currently have mortgage) in about two years. About two months ago, an account I thought was settled hit my bank account as a charge off. (in short, I entered in to a debt consolidation program years ago, and am still paying for it - big mistake).
So, thinking I had taken care of it, I decided to investigate. I called the lender, Dell Financial Services, and they told me that I still owed them money. When I asked the amount, it was to the exact penny what I had paid. I called the law firm that assumed the debt and got the run around for about 1.5 months, until yesterday. Yesterday I was told that yes they received my payment, but was told by Dell not to send any money to them. So, as a result, the law firm is going to return the money to me.
Before I go any further, here is the data for this lender on my credit report:
Charge Off as of Feb 2010, May 2008, Sep 2007, Jan 2007, Jan 2006, Dec 2005
150 days past due as of Nov 2005
120 days past due as of Oct 2005
Now, if what I understand is correct, the CO should be on my report from the first time it was a CO for 7 years - which was December of 2005. This means it should stay on my report until December of 2012.
So, I have two schools of thought on this.
1 - Obtain in writing something from the law firm, stating they were told by Dell not to send them the money. My intent would then be to pay Dell directly, and work with them to see if we can get the CO information removed from my report since the payment was made - which was I think March of 2008. This would remove the most recent (not listed), as well as Feb 2010 and May 2008. I'm not sure they would do that though.
2 - If it will be on my report only until December of 2012 and I'm not planning on buying a house until summer of 2013, give or take, should I just let it ride and keep the money I'm getting back? I'm not confident Dell will cooperate and remove the CO's since it was paid, so giving them the money won't give me much benefit if indeed it does go away completely in December of 2012
There is a lot of assumption here, so if anyone has any insight it's much appreciated.
08-18-2011 01:55 PM
The 7-7.5 yr CRTP period actually starts ticking at the DOFD of the debt. This is the date you first went late and never recovered. You'd want to pull your credit reports from annualcreditreport.com to confirm (free), but if you had a 120 day late in 10/2005, then in 9/2005 you were 90, in 8/2005 you were 60, and in 7/2005, you experienced your first late. Based on what you posted, the 7-7.5 yr clock started on 7/2005 and this TL should fall off by next summer.
If your goal is to get it off sooner, then mail them a GW letter asking Dell if they wouldn't mind deleting earlier. They can still report though through the end of the 7-7.5 yr period.
It doesn't hurt to try a GW. The only downside is the impact to your AAoA and length of history. If this is a super old account in relation to your others, then perhaps the history helps more than the baddie hurts. It depends on your credit. If it did fall off earlier and you did see a score drop, then that's not a bad thing because it would have naturally have fallen off by next year anyway, before your planned mortgage app.
08-18-2011 03:12 PM
Thanks for the tip - I'm not overly concerned with it until we go for the mortgage, and as you referenced I'd rather keep the account on there as history.
So, to clarify - after the 7/7.5 year period, the account and negatives will still be on my report but they won't count against my score or be considered? If that is the case, probably makes the most sense to keep the money since it will go away in roughly a year from now.
Would you agree? I mean is there any real benefit to forking over the cash, which is almost $3,000?
08-20-2011 08:10 PM
The FCRA says "7 years plus 180 days" (hence the 7-7.5 yrs) so it'll either completely delete sometime starting 7/2012 to 12/2012 (7/2005 appears to be the DOFD), or, in some cases, all the lates and negative references will have been all gone by July and it'll report as a positive for up to 3 more years from that point. It's a YMMV based on creditor. You'll find that most of your baddies will naturally drop on the first of each month.