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tacoblade
Posts: 26
Registered: ‎01-08-2013
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Does FICO factor "Current Status" on closed accounts?

Sorry if this is the wrong board, and/or if this has asked 100 million times before...

 

I have a mortgage account that was transferred to a new servicer in 2011. On my Equifax credit file, notes on the TL with the previous servicer report it as closed/transferred, but the current status shows as "120 Days Past Due". The account was deliquent prior to the account being transferred; however shouldn't the current status reflect that It closed / transferred? What impact does this have on my credit score? If I had to guess, FICO probably looks at this as if I am 120 days late every month for this account.

 

Thanks in advance.

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llecs
Posts: 32,869
Registered: ‎08-04-2007
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Re: Does FICO factor "Current Status" on closed accounts?

It's a drain, but the source of the drain are the 120+ day late(s) reporting anywhere within the reported 7-yr history. Once the lates are removed, then it'll say "paid as agreed" or something similar (vs. closed). FICO focuses on the most severe late and the recentness of that late. Try sending the lender a Goodwill letter.

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tacoblade
Posts: 26
Registered: ‎01-08-2013
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Re: Does FICO factor "Current Status" on closed accounts?

Thanks for the insight. Just one more question: If FICO looks at the most severe late and it's recentness, does it care if the late marks were added to the account history after an account is closed? My EQ file has two "120 Days Past Due" marks in the history for 2012 for the same account, even though it shows it was transferred in 2011. I have been fighting both the new servicer and EQ to properly update the TL (I may have to take legal action :smileysad: ). If FICO disregards the fact that the account was closed prior and just looks at the lates, then my score is probably in worse shape than I thought.

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RobertEG
Posts: 18,215
Registered: ‎03-19-2007
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Re: Does FICO factor "Current Status" on closed accounts?

Current status is a hybrid code.  It is a snapshot only, and does not relate to prior history.

While an account has a current delinquency, the current status will reflect that level of delinquency.  However, when some payment status occurs that places the account back into good standing, or the account is closed and satisfied, the current status switches over to then reflect current payment status.

 

All prior delinquencies are retained under separate reporting codes, which are retained.  When scoring payment history, FICO looks at those codes, not the current status, which does not reflect prior history.

 

If the closed account is subsequently satisfied, its current status will switch to paid, and the prior lates will all be retained under their separate codes, and continue to be scored.

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tacoblade
Posts: 26
Registered: ‎01-08-2013
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Re: Does FICO factor "Current Status" on closed accounts?

[ Edited ]

Ok, got it. So FICO does not factor "Current Status" when scoring, only account history. I'm betting FICO does not discount late marks reported after the date a given account was closed (wrong as it may be), and that my credit score is getting screwed sideways due to the servicer's reporting error.

 

Thanks to you both for weighing in on my situation.

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llecs
Posts: 32,869
Registered: ‎08-04-2007
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Re: Does FICO factor "Current Status" on closed accounts?


tacoblade wrote:

Ok, got it. So FICO does not factor "Current Status" when scoring, only account history. I'm betting FICO does not discount late marks reported after the date a given account was closed (wrong as it may be), and that my credit score is getting screwed sideways due to the servicer's reporting error.

 

Thanks to you both for weighing in on my situation.


It certainly does. It doesn't matter when an account was marked closed, any late showing will impact the FICO score. For example, let's say you have a CC and for whatever reason the lender closes the account. Maybe they went out of business. Maybe there was some derogs reporting which influenced their decision, or whatever. Anyway, they close it and you're on-time up to that point but there's a balance remaining you're paying on. Let's say you pay it late going forward a year after it's closed. If you're late 30 days, FICO will score that 30-day late even though the date of closure was a year prior. The status will update to something like "Was 30 days late" or something like that after bringing the account current again. The worst delinquency is 30 days and FICO will score accordingly.

 

 

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AndySoCal
Posts: 1,947
Registered: ‎04-07-2009
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Re: Does FICO factor "Current Status" on closed accounts?

I presume the account is currently reporting a zero balance. Is the date reported the same date as the 120 late date.  IE the account was reported in 4/2012 with a zero balance and the 120 late is 4/2012. If so either talk to the lender to correct it or dispute it. You cannnot owe zero and be 120 days late at the same time.it is not possible.

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tacoblade
Posts: 26
Registered: ‎01-08-2013
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Re: Does FICO factor "Current Status" on closed accounts?


AndySoCal wrote:

I presume the account is currently reporting a zero balance. Is the date reported the same date as the 120 late date.  IE the account was reported in 4/2012 with a zero balance and the 120 late is 4/2012. If so either talk to the lender to correct it or dispute it. You cannnot owe zero and be 120 days late at the same time.it is not possible.


Correct, the account is reporting a $0 balance ever since it was transferred in 2011. I've disputed this with Equifax twice thus far (they claim that they "verified" with the data furnisher that the reporting is correct), and I am now on my 2nd dispute with the lender (they claim they have not done any further reporting since 2011). I am about ready to hang myself at the end of the proverbial rope. I'm no lawyer, but I'm sure this has to be in violation of the FCRA somehow.

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tacoblade
Posts: 26
Registered: ‎01-08-2013
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Re: Does FICO factor "Current Status" on closed accounts?


llecs wrote:

It certainly does. It doesn't matter when an account was marked closed, any late showing will impact the FICO score. For example, let's say you have a CC and for whatever reason the lender closes the account. Maybe they went out of business. Maybe there was some derogs reporting which influenced their decision, or whatever. Anyway, they close it and you're on-time up to that point but there's a balance remaining you're paying on. Let's say you pay it late going forward a year after it's closed. If you're late 30 days, FICO will score that 30-day late even though the date of closure was a year prior. The status will update to something like "Was 30 days late" or something like that after bringing the account current again. The worst delinquency is 30 days and FICO will score accordingly.


Thanks for clarifying; that's exactly what I needed to know.

Valued Member
tacoblade
Posts: 26
Registered: ‎01-08-2013
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Re: Does FICO factor "Current Status" on closed accounts?

I recieved confirmation from the loan servicer that they submitted a request to all 3 CRAs to remove the late marks. Crossing my fingers and will pull my report sometime next week to confirm. 

 

Sorry to ressurect a dead thread.. just wanted to give an update.


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