Posts: 8
Registered: ‎11-03-2010

charge off valid?

I purchased an auto in 03' and had several legitimate lates durring the finance period. In 06' I was really late like 120 days but soon after I sold my house and had used some of my profit to pay the entire loan off in one shot.  I received pay off letter and title from Honda but the CR account is listed as a Charge Off. Is there any way to revert this back to a zero balance with lates status..?



Valued Contributor
Posts: 2,698
Registered: ‎08-13-2009

Re: charge off valid?

It's worth calling Honda and saying you think there might be a mistake, but are confused, would they help you understand it.


Then have them pull the account information and go over it with you.   It may be that in their books, you were 180 days late and it went to charge off status before your payoff payment cleared.  If that is the case, they maybe reporting accurately, but you can ask them to update it to paid in full, zero balance.

Mega Contributor
Posts: 19,005
Registered: ‎03-19-2007

Re: charge off valid?

A charge-off is not, per se, simply a credit reporting matter.  A charge-off is an internal bookeeping measure done by the OC.

They notify the IRS that the debt is now considered "uncollectible," usually due to a period of being 120 or more days late.  The IRS then permits them, for accounting purposes, to shift the bad debt over in their accounting ledger from a collectible asset to a uncollectible liability, thus reducing their quarterly taxes.

Once an OC does a CO, they dont have to report it to a CRA, but they usually do.  Doing a CO does not eliminate the debt or your obligtion to pay.  Paying the debt does not negate the fact of the CO.reporting to your CR.  It just updates debt balance on the account to $0, but does not mandate any CR reporting deletion.

The only way to get it removed is to send them a GW letter.  They wont udo the CO itself, but since reporting of the CO to a CRA is optional on their part to begin with, there is a chance that they will delete that CRA reporting.  Having taken them to the point of designating the debt as uncollectible when they did the CO itself, it may be a tough GW sell.  All you can do is try.........

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+