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Global1
Posts: 3
Registered: ‎06-07-2007
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What impact will past due reporting on Charged Off Account Have?

If I have a past mortgage account on my credit that is showing the following info:
 
Account Type:    conventional Real Estate
Account Status : Frozen / Charged Off as Bad Debt / Charge Off 
Activity:               "Reported 04/2007   Opened 04/2003   Last Active 06/2003  "
Balance: $48K
Past Due: $23K  0
 
Without going into too much detail I was involved in a real estate related fraud scam at that time in which the party committing the fraud has since been convicted & is thankfully behind bars.  Given the nature of the scam my legal counsel was able to convince the Mortgage Company that my obligation to the debt was negated-----thus the charge off status given. 
 
My concern & question relates to the "past due amount" still reporting on my credit in excess of $23,000 and what affects it might be having over time if any?  Even if it is having a nominal impact this obviously concerns me given over several years of continuing to do so could add up to harm my credit irreparably.  
 
Basically:
Is this "past due amount" having a negative affect on my credit over time with each consistent reporting???  Even though the last active reporting is dated---will the "past due amount" continue to hurt me given the recent reporting on this account of 04/2007???
 
Any words of wisdom to help calm or spark my level of concern with this???  Any help would be greatly appreciated.  Thank You!
 
Global1
Administrator Emeritus
Barry
Posts: 4,390
Registered: ‎03-01-2007
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Re: What impact will past due reporting on Charged Off Account Have?



Global1 wrote:
If I have a past mortgage account on my credit that is showing the following info:
 
Account Type:    conventional Real Estate
Account Status : Frozen / Charged Off as Bad Debt / Charge Off 
Activity:               "Reported 04/2007   Opened 04/2003   Last Active 06/2003  "
Balance: $48K
Past Due: $23K  0
 
Without going into too much detail I was involved in a real estate related fraud scam at that time in which the party committing the fraud has since been convicted & is thankfully behind bars.  Given the nature of the scam my legal counsel was able to convince the Mortgage Company that my obligation to the debt was negated-----thus the charge off status given. 
 
My concern & question relates to the "past due amount" still reporting on my credit in excess of $23,000 and what affects it might be having over time if any?  Even if it is having a nominal impact this obviously concerns me given over several years of continuing to do so could add up to harm my credit irreparably.  
 
Basically:
Is this "past due amount" having a negative affect on my credit over time with each consistent reporting???  Even though the last active reporting is dated---will the "past due amount" continue to hurt me given the recent reporting on this account of 04/2007???
 
Any words of wisdom to help calm or spark my level of concern with this???  Any help would be greatly appreciated.  Thank You!
 
Global1


In some cases, balances and past due amounts on negative accounts can impact your score, and thus paying them down or off can raise your score.
 
Unfortunately, it's hard to tell when this is the case and when not, but it has to do with how recently the account was reported to the bureau.
 
The more recently it was reported, the more likely the past due amount is affecting your score.  Sorry I can't be more specific....
 
-Barry
In a past life I served as FICO consumer affairs manager, FICO media spokesman, and myFICO Forums community manager from 2007 to 2012. I'm now freelance writing about credit at CreditCards.com and on my own site, SpeakingOfCredit.com.
New Member
Global1
Posts: 3
Registered: ‎06-07-2007
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Re: What impact will past due reporting on Charged Off Account Have?

[ Edited ]
Thanks for your input Barry.
To clarify the impact by the sounds of it has to do with the last "reporting date" listed on the account not the "last active" date, correct? I only ask that because if the impact lessens as time passes and the "last active" date was back in 06/2003 versus the "reporting date" listed as 04/2007----the recency of those two is obviously paramount to the impact it is having on the score!
If this is the case does the amount reporting past due have anything to do with the actual score amount affected over time? In other words would a larger amount owed (i.e. 23K) have more of an affect than a smaller amount?
Thank you again for you response thus far. If you can shed any light as to my additional concerns I would be grateful for any thoughts you may have.
Global1
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Message Edited by Raine on 06-08-2007 01:56 PM
Administrator Emeritus
Barry
Posts: 4,390
Registered: ‎03-01-2007
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Re: What impact will past due reporting on Charged Off Account Have?



Global1 wrote:
Thanks for your input Barry.
To clarify the impact by the sounds of it has to do with the last "reporting date" listed on the account not the "last active" date, correct? I only ask that because if the impact lessens as time passes and the "last active" date was back in 06/2003 versus the "reporting date" listed as 04/2007----the recency of those two is obviously paramount to the impact it is having on the score!
If this is the case does the amount reporting past due have anything to do with the actual score amount affected over time? In other words would a larger amount owed (i.e. 23K) have more of an affect than a smaller amount?
Thank you again for you response thus far. If you can shed any light as to my additional concerns I would be grateful for any thoughts you may have.
Global1
[e-mail removed]


(Your e-mail has been removed to protect your privacy. I apologize for the inconvenience!)

Message Edited by Raine on 06-08-2007 01:56 PM

 
For calculations regarding amounts due on negative accounts, both the reporting date and date of last activity are used.  That is, some factors looking at these amounts due use the reporting date and others look at the DLA to determine recency.  Sounds pretty vague, I know, but that's as specific as I can get.
 
To your other point about the impact of the amounts owed, if the amount owed is, in fact, being considered by the score, then, yes, the higher the amount owed, the more of a negative impact to the score
 
-Barry

In a past life I served as FICO consumer affairs manager, FICO media spokesman, and myFICO Forums community manager from 2007 to 2012. I'm now freelance writing about credit at CreditCards.com and on my own site, SpeakingOfCredit.com.
Senior Contributor
ilovepizza
Posts: 3,071
Registered: ‎05-17-2007
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Re: What impact will past due reporting on Charged Off Account Have?

[ Edited ]
I am just curious? If you have legal counsel that was able to remove obligation of debt, why is this still showing a charge off. In fact, this entire history should be removed completely good or bad if due to fraud. It just makes sense to me if you are no longer obligated to pay whether it was good will or forced legally the same should be done on your credit report! I don't know the whole story, but still considering, it might be understandable if payments were late or missed or never paid. Contact your lawyer about this. Do you have anything in writing stating you are not obligated to pay????? If so you have a strong case to have it removed completely! I might be way off since I don't have all the facts. But I would fight it to the end. That's a big charge off to be sitting on your account for 7 years. I would not be so worried about the score as much as the amount shown when a human reads your file. :smileysad:

You really need to do what you can to have that changed. It's not good. You are also able to place a notation under the account for creditors to read to explain the situation. I recommend doing that if all else fails. I don't think charge off status belongs on this account. It should be adjusted to subtract the remaining balance and show as PAID AS AGREED or deleted completely.

Fight it with the Mortgage company. This is so legal over me, you need to contact a lawyer. If you had papers showing that you were released from the balance due, you might be able to use that showing account closed, not charged off. That charge off status should have only been internal. I can't believe they put that on your credit. That's like a judge saying ok, you are found NOT GUILTY but you have to server 7 years in prison. See it doesn't make sense. Start with the Mortgage company.

Message Edited by ilovepizza on 06-10-2007 05:59 PM
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Frequent Contributor
chartley3
Posts: 489
Registered: ‎05-23-2007
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Re: What impact will past due reporting on Charged Off Account Have?

Agreed if this is fraud related and you have the paperwork to back it up I'd have your lawyer fight to have this removed from your CR ASAP. I would also at the very least put in a consumer statement regarding that TL that was as due to fraud on another party.

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