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Question on C/O account still reporting after 6+ years

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Anonymous
Not applicable

Question on C/O account still reporting after 6+ years

Hello everyone. Just wondering what kind of increase I would see once a c/o falls off at the seven year mark. They company has reported every month and looks like they will until the very end. Once the account ages off, would it count as if it was a recent c/o or as an old account that simply went away? I believe it's killing my score every month with the reporting.
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Anonymous
Not applicable

Re: Question on C/O account still reporting after 6+ years

If it is your very last baddie you could see a significant score increase possibly 80 points or greater.

 

If you have other chargeoffs, collections or lates, you may see little to no score increase.

Message 2 of 4
Anonymous
Not applicable

Re: Question on C/O account still reporting after 6+ years

Once anything derogatory is removed from your files, it would be as if it were never there.

Message 3 of 4
RobertEG
Legendary Contributor

Re: Question on C/O account still reporting after 6+ years

When any unpaid, delinquent account updates, it is a postive statement by the creditor that the account remains deliquent as of the new reporting date, and thus the length of the period of delinquency has increased.  Consumers dont get scoring benefit for increased delinquency.

If the current status, which is a snapshot status only with no historical information, remains a CO, that is positive update by the creditor that the debt remains delinquent, and that the overall period of delinquency has extended.  Yes, updated reporting can hurt your scoring just as an increase in delinquency from, for example, 60 to 90 days can hurt scoring.

 

However, once the consumer pays the debt, there is no longer a delinquency, and thus the impact of the derogs can begin to age.

Thus, paying can begin the healing.

 

Since the FCRA mandates the total exclusion of the CO from credit reports, and thus scoring, at a set period, if the account is near the end of the CO exclusion period of no later than 7 years plus 180 days from the DOFD, the consumer might not be concerned with the continued adverse affect of any updating, as it will all be academic (scoring wise) once the CO is removed from scoring.

However, presence of unpaid, delinquent debt might still be an issue in future quests for credit, and paying will remove any issues of having that skeleton in the closet.

 

 

 

 

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