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Can someone explain the difference between Statute of Limitations vs Date of Delinquency??? The statement below was copied from a facebook page of a credit repair person....
I agree with some of the information but I disagree with the statement in red. Paying the debt off or contacting the creditor DOES NOT update the 7yrs....correct??
https://www.facebook.com/LuxuriousCredit?fref=ts
Paying old debts or charge-offs can significantly lower your credit score and damage your credit report. When an account is charged off, the account has been written off the lender’s books. This is why they must report the balance as $0 when selling the debt to a collection agency.
So let’s say for example you had a credit card with Old Navy and it charged off July 2011 at $1,000. You receive a settle offer for $500 today. If you take that settlement offer, the account will update from 2011 to 2014 (giving the appearance of a new account) AND Old Navy will now report the deficit balance (the difference between the full amount you originally owed and the “settled” amount you paid) on your credit report. Then to make matters worse, Old Navy is going to report “SETTLED LESS THAN FULL AMOUNT OWED”
By doing this, you have just made an old account NEW. It has now reaged and the statue of limitations has started over. So instead of the Old Nay account falling off of your credit report July 2018, it will now fall off July 2021. You have just added three more years worth of bad credit to your credit report.
Negative debt is NEGATIVE. Negative debt that has been settled for the FULL amount is still negative. A negative old debt that has been settled for less than the full amount is still negative.
My suggestion (or if it were me): I know paying an old debt will not help me at all! I would focus on reestablishing credit and looking for any inaccuracies in regards to the old debt and challenge it with the credit bureaus.
The DOFD isn't reset by making a payment. It is 7.5 years from the date of first delinquency that led to the CO before the item will fall off your report and nothing can change that.
The other part is true. If the CA hasn't been reporting monthly for awhile and then you pay and it updates, FICO will look at it as a brand new collection which would impact your score.
I think there is some confusion with the SOL and CRTP.
@ssondubs wrote:
The DOFD isn't reset by making a payment. It is 7.5 years from the date of first delinquency that led to the CO
The other part is true. If the CA hasn't been reporting monthly for awhile and then you pay and it updates, FICO will look at it as a brand new collection which would impact your score. Yes I understand this part. We disagreed on her saying that if her client makes a payment it would reset the 7yr. That's incorrect. That just changes the date of last activity.
I think there is some confusion with the SOL and CRTP.
I just felt like she should be completely correct if she is accepting money to repair one's credit
@kezia2410 wrote:
@ssondubs wrote:
The DOFD isn't reset by making a payment. It is 7.5 years from the date of first delinquency that led to the CO
The other part is true. If the CA hasn't been reporting monthly for awhile and then you pay and it updates, FICO will look at it as a brand new collection which would impact your score. Yes I understand this part. We disagreed on her saying that if her client makes a payment it would reset the 7yr. That's incorrect. That just changes the date of last activity.
I think there is some confusion with the SOL and CRTP.I just felt like she should be completely correct if she is accepting money to repair one's credit
Lying is the norm for businesses engaged in credit repair....
They also can list the unpaid/settled amount as a balance. It would have to show $0 in the balance.