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UPDATE: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

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Anonymous
Not applicable

UPDATE: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

UPDATE: Capital One updated the balances of my cards but they're not at zero even though I received notice this has been settled in full from the CA. They are also still showing as open. 

 

1st Account: Starting balance - $519 - paid $208 to settle in full - Balance on report now showing $311 owed

2nd Account: Starting balance - $410 - paid $164 to settle in full - Balance on report now showing $246 owed

 

What should I do? I'm thinking of contacting Capital One with the paperwork that this was settled in full and to either 1. Update the tradeline or 2. Offer to pay the remaining balance to have the tradeline updated and all negative marks removed (say the account is closed and in good standing/lates removed) or deleted all together. Do you think this is even possible? I appreciate all your feedback!

 

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A question for all the gurus out there. I have two charged-off accounts with Capital One and both are still showing as having a balance and reporting late even though they were charged-off in 2016. The debt bounced around to a few collection agencies but I finally paid off a reduced settled amount with the most recent collection agency. I have few questions below:

 

1. Can Capital One still report a balance and lates even though this was charged-off?

2. The collection agency never reported to my credit but now that it's settled should I contact Capital One to update the balance?

3. Should I file a dispute with the credit bureaus or contact Capital One instead?

 

I'm wary of annoying Capital One as they JUST issued me a new card less than a month ago and I don't want to create any issues with them. I'm just now in the process of paying off old collections and just got approved for my first credit cards in almost two years! Getting the Capital One cards shown as a balance of zero would be amazing, any advice?

Message 1 of 7
6 REPLIES 6
RobertEG
Legendary Contributor

Re: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

The creditor can continue to update their reporting monthly to show that the account continues to be delinquent.

Delinquency status can be reflected either as a set number of months since initial delinquency (e.g., 150 days late), or broadly as a charge-off.

 

Unless they sent a bill, thus providing a billing due date, the delinquency addition to the payment history profile should be done by reporting CO, and the current status should show charge-off. 

 

Once the debt is paid, the creditor is required under FCRA 623(a)(2) to "promptly" update their reporting to show paid (non-delinquency status), and the current balance updated to $0.  Promptly is generally interpreted as being in their next regular reporting cycle after the payment has been processed and accepted, so there is usually a delay of 30-45 days.

 

I would first call and remind them of their statutory obligation under section 623(a)(2) to initiate the update.

I would wait to file a formal dispute for at least one monthly reporting cycle.

 

 

Message 2 of 7
Anonymous
Not applicable

Re: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

Thank you so much! I just paid everything off a few weeks ago so I will contact them if they haven't updated anything by the end of February. 

Message 3 of 7
Miner
Frequent Contributor

Re: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

Capital 1 does not usually sell their accounts, so the collection agency was working on their behalf which is why you don't see a collection on you CR.
When everything settles out, you should see both accounts showing charged off, paid but settled for less. All the individual chargeoffs/lates for every month til it was paid will remain but they will likely update the new month to show paid on time.
Keep track of the date first went bad so you'll know when they fall off. Chargeoffs are an anchor on your CR, much more do than a 30/60 day late and the impact never truly fades till they drop off.
When I paid my charged off account with Capital 1, it took them ~5 weeks to update as they wanted to be extra sure the check couldn't be called back. I was told if I needed a faster update then I needed to use an alternative money transfer service like Western Union.
Current FICO8: EQ:782, TU:754, EX:767 | 1x 30 day late 6yrs ago
AAoA: 10 years; AAoOA: 13 months; Credit Length: 21 years
INQ Eq: 3 / Tu: 5 (4 for auto) / Ex: 9 (5 for auto)
Message 4 of 7
Anonymous
Not applicable

Re: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

Thanks Miner, 

 

I have a few charge-offs but almost all are reporting as $0. Do you think I would have any success with a GW letter to try and get the charge-offs removed once everything has been paid off? 

Message 5 of 7
Miner
Frequent Contributor

Re: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

I know some people on the forum have had success getting items removed through GW letters.  Usually it's best to have all the negative accounts brought into good standing (by paying them off or at least current) first on your credit report and then have a solid payment history going for awhile before trying to GW.  It will make your "I've learned my lesson and turned over a new leaf" plea much more believable then the person who just missed another payment 2 months ago.   Search the forums on strategies for GW. 

 

I haven't bothered in my case since I know my stuff falls off at the end of this year (debt was already almost 6 years old when I paid it).  I'm going for the early exclusion route with the credit agencies when I get within the 6 month mark.

Current FICO8: EQ:782, TU:754, EX:767 | 1x 30 day late 6yrs ago
AAoA: 10 years; AAoOA: 13 months; Credit Length: 21 years
INQ Eq: 3 / Tu: 5 (4 for auto) / Ex: 9 (5 for auto)
Message 6 of 7
Anonymous
Not applicable

Re: UPDATE: Charge-Off Reporting w/Original Creditor but Paid Collection Account Off

Bump, updated!

Message 7 of 7
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