topic Re: "Your Chase account is being managed by United Collection Bureau" uh... in General Credit Topics

Charge-Off's count toward Utilization? This is CRUSHING me

The_Rooster — Thu, 22 Aug 2019 14:17:28 GMT

I had a rough patch a couple years back and charged-off a $5,000 + Chase card.

It is now biting me in the butt, as even though it is marked "Charged Off", the $5,000 balance is still crushing my utiliziation % on EXPERIAN and TRANSUNION.

Equifax doesn't seem to be counting it, so my utilization is only 20%. But Experian and Transunion are counting the $5k and my utilization is around 100% because of it.

Is this normal? My other charged-off card is not counting toward my utilization %, as I couldn't pay it back even if I wanted to.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

Remedios — Thu, 22 Aug 2019 14:44:00 GMT

Hi @The_Rooster and welcome to the forums

Charged off cards count towards utilization, so if EQ is somehow not including in, just consider yourself lucky.

Just because card is charged off, it does not mean that balance on it is $0.00. It's an accounting measure, meant to remove the amount from receivable assets

As long as it remains unpaid or is no longer reportable, it will continue affecting your utilization, so yes, it's normal.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

The_Rooster — Thu, 22 Aug 2019 14:51:31 GMT

Thank you @Remedios ... So, how do I lower the utilization? Chase says I cant pay it, because it's charged off.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

Remedios — Thu, 22 Aug 2019 15:23:26 GMT

@The_Rooster wrote:
Thank you @Remedios ... So, how do I lower the utilization? Chase says I cant pay it, because it's charged off.

Is there a collection associated with it? What's the DOFD?

Re: Charge-Off's count toward Utilization? This is CRUSHING me

The_Rooster — Thu, 22 Aug 2019 15:26:14 GMT

@Remedios wrote:
@The_Rooster wrote:
Thank you @Remedios ... So, how do I lower the utilization? Chase says I cant pay it, because it's charged off.
Is there a collection associated with it? What's the DOFD?

I haven't seen a collection yet.

But if that happens, wouldn't that mean I have DOUBLE the amount for one account? A $5,000 Original Credit account AND a $5,000 collection account?

DOFD was March 2018.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

Anonymous — Thu, 22 Aug 2019 15:31:06 GMT

If it was charged off and sold then the balance should be reported as 0. I think because once the collection pop up, it would be like double dipping. In my case, all of my charge offs that were sold were updated to a 0 balance. The ones that were just charged off but not sold sti retained the same balance. I would see if it was sold and if so, report to the credit bureaus that the balance is 0 with them which is technically true since they sold the balance to another company so they no longer have it on their books.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

Remedios — Thu, 22 Aug 2019 16:06:36 GMT

@The_Rooster wrote:
@Remedios wrote:
@The_Rooster wrote:
Thank you @Remedios ... So, how do I lower the utilization? Chase says I cant pay it, because it's charged off.
Is there a collection associated with it? What's the DOFD?
I haven't seen a collection yet.

But if that happens, wouldn't that mean I have DOUBLE the amount for one account? A $5,000 Original Credit account AND a $5,000 collection account?

DOFD was March 2018.

No, it would not double.

I dont know who you talked to at Chase told you that you cannot pay it.

If they did not forward it to collection agency , you should be able to pay it directly.

If they forwarded it to collections (but it's not reporting yet), you would want to know who to contact.

It's a fairly recent CO, high amount, Chase is prone to engaging in litigation, so I'd keep calling if I were you.

Document all the calls, who you talked to, what they told you, dates and time. You'll need this if at some point you have to file a complaint.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

The_Rooster — Thu, 22 Aug 2019 16:57:54 GMT

@Remedios wrote:
@The_Rooster wrote:
@Remedios wrote:
@The_Rooster wrote:
Thank you @Remedios ... So, how do I lower the utilization? Chase says I cant pay it, because it's charged off.
Is there a collection associated with it? What's the DOFD?
I haven't seen a collection yet.

But if that happens, wouldn't that mean I have DOUBLE the amount for one account? A $5,000 Original Credit account AND a $5,000 collection account?

DOFD was March 2018.
No, it would not double.
I dont know who you talked to at Chase told you that you cannot pay it.
If they did not forward it to collection agency , you should be able to pay it directly.
If they forwarded it to collections (but it's not reporting yet), you would want to know who to contact.
It's a fairly recent CO, high amount, Chase is prone to engaging in litigation, so I'd keep calling if I were you.

Document all the calls, who you talked to, what they told you, dates and time. You'll need this if at some point you have to file a complaint.

Ok, I'm going to call back and give them my name this time.

I asked a generic question last time "IF my account is charged off, etc etc".

Now i'll just tell them who I am.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

RobertEG — Thu, 22 Aug 2019 20:48:21 GMT

A charge-off should be looked at as a form of reporting of degree of delinquency, and just as revolving balances are not removed from scoring under % util based on the account being, for example, 150-days late, they are not removed from % uti scoring based on having been charged-off.

A charge-off is taken, and sometimes required under federal regs, when a delinquent account has been determined to have reached the stage where it is not reasonably expected to be repaid,

Federal regs generally require banks to charge delinquent debts to profit and loss once an installment loan reaches 120-late, or a revolving debt reaches 180-late. Those periods of delinquency are considered as reasonable evidence that consumer repayment has become unlikely.

From an accounting point of view, a CO is intended to prevent creditors and businesses from overstating their "real" assets in accounting statements provided to their shareholders and potential investors by removing the delinquent debt from their statement of assets, and moving it to a column that is not summed as an asset. The intent of the regs is to provide a more accurate statement of assets.

Taking of a CO does not remove continued obligation of the consumer for the entire debt, does not remove the ability to continue reporting of current and prior monthly payment history delinquency, or prevent the creditor or debt collector from continued collection attempts.

The CRAs provides creditors, as separate codes under their common credit reporting manual, the option to report both current and prior payment history profile delinquency status as either months delinquent (e.g., 120-late) OR as CO, which additonally states that the debt is not expected to be paid, and provides the length of the delinquency by reference to the separately reported DOFD.

Just as reporting of 150-late, for example, does not remove a delinquent revolving debt from continued scoring under % util, a curent balance continues to be scored under % util until paid or otherwise discharged.

There are several ways a debt is updated to show a current balance of $0.

First, is, obviously, by paying the debt.

Second is if the creditor sells the debt to another. They are then required to promptly report a current debt balance of $0.

Third is by discharge under bankruptcy.

Fourth is if the creditor decides to formally cancel the debt, which sometimes done if they dont wish to sell the debt or to continue collection attempts. If they formally cancel the debt, they are required to send notice to the IRS if the amount is $600 or more via IRS form 1099c, a copy of which is also provided to the consumer.

Re: Charge-Off's count toward Utilization? This is CRUSHING me

The_Rooster — Thu, 29 Aug 2019 21:59:46 GMT

@RobertEG wrote:
A charge-off should be looked at as a form of reporting of degree of delinquency, and just as revolving balances are not removed from scoring under % util based on the account being, for example, 150-days late, they are not removed from % uti scoring based on having been charged-off.

A charge-off is taken, and sometimes required under federal regs, when a delinquent account has been determined to have reached the stage where it is not reasonably expected to be repaid,
Federal regs generally require banks to charge delinquent debts to profit and loss once an installment loan reaches 120-late, or a revolving debt reaches 180-late. Those periods of delinquency are considered as reasonable evidence that consumer repayment has become unlikely.

From an accounting point of view, a CO is intended to prevent creditors and businesses from overstating their "real" assets in accounting statements provided to their shareholders and potential investors by removing the delinquent debt from their statement of assets, and moving it to a column that is not summed as an asset. The intent of the regs is to provide a more accurate statement of assets.

Taking of a CO does not remove continued obligation of the consumer for the entire debt, does not remove the ability to continue reporting of current and prior monthly payment history delinquency, or prevent the creditor or debt collector from continued collection attempts.

The CRAs provides creditors, as separate codes under their common credit reporting manual, the option to report both current and prior payment history profile delinquency status as either months delinquent (e.g., 120-late) OR as CO, which additonally states that the debt is not expected to be paid, and provides the length of the delinquency by reference to the separately reported DOFD.

Just as reporting of 150-late, for example, does not remove a delinquent revolving debt from continued scoring under % util, a curent balance continues to be scored under % util until paid or otherwise discharged.
There are several ways a debt is updated to show a current balance of $0.
First, is, obviously, by paying the debt.
Second is if the creditor sells the debt to another. They are then required to promptly report a current debt balance of $0.
Third is by discharge under bankruptcy.
Fourth is if the creditor decides to formally cancel the debt, which sometimes done if they dont wish to sell the debt or to continue collection attempts. If they formally cancel the debt, they are required to send notice to the IRS if the amount is $600 or more via IRS form 1099c, a copy of which is also provided to the consumer.

Wow, that was a wealth of knowledge.

Thank you!

"Your Chase account is being managed by United Collection Bureau" uh...

The_Rooster — Thu, 29 Aug 2019 23:26:50 GMT

"Managed by" ... Does that mean it was not sold to them, Chase just allows them to collect the debt FOR them?

Because my Credit report has 0 collection accounts, and Chase still shows a $5,200 balance on the chargeoff.

I want to settle this account and get it down to $0 because it is killing my utilization, but I don't want to deal with a scummy debt collecter. Would rather deal with Chase.

Re: "Your Chase account is being managed by United Collection Bureau" uh...

The_Rooster — Fri, 30 Aug 2019 15:34:32 GMT

Anyone have any idea?

Re: "Your Chase account is being managed by United Collection Bureau" uh...

Remedios — Fri, 30 Aug 2019 15:39:55 GMT

@The_Rooster wrote:
"Managed by" ... Does that mean it was not sold to them, Chase just allows them to collect the debt FOR them?

Because my Credit report has 0 collection accounts, and Chase still shows a $5,200 balance on the chargeoff.

I want to settle this account and get it down to $0 because it is killing my utilization, but I don't want to deal with a scummy debt collecter. Would rather deal with Chase.

Hi and welcome to the forums

If Chase wont take payment from you and it's directing you to United Collection Bureau, you dont have a choice but to deal with them.

If you haven't already, call Chase, let them know you want to talk about payment on a charged off account. They will advise you from there

Re: "Your Chase account is being managed by United Collection Bureau" uh...

Brian_Earl_Spilner — Fri, 30 Aug 2019 15:45:37 GMT

What did Chase say when you called and asked them about it? If you haven't called them, that should be your first step. Also, if you ever want another Chase card again, you should pay in full, not settle. Much laess hassle.

Re: "Your Chase account is being managed by United Collection Bureau" uh...

The_Rooster — Fri, 30 Aug 2019 16:06:04 GMT

@Brian_Earl_Spilner wrote:
What did Chase say when you called and asked them about it? If you haven't called them, that should be your first step. Also, if you ever want another Chase card again, you should pay in full, not settle. Much laess hassle.

When I call Chase, it asks me to enter my account #, and then it immediately directs me to the Collection agent.

But if it's with a collection agency, it should not show balance on my bureau with chase...

Re: "Your Chase account is being managed by United Collection Bureau" uh...

The_Rooster — Fri, 30 Aug 2019 17:00:06 GMT

Just got off the phone with Chase.

They explained that they did NOT sell the account.

They simply let United Collections MANAGE the account for them, but Chase still owns it.

They offered to settle the $5,300 account for $2,300.

Should I take it?

They said it will make the balance $0 on my credit, but did not say what "designation" it would have (paid charge off, settled, etc).

According the MyFico score simulator, removing this debt from $5,300 to $0 would increase my scores 65 points.

My Equifax supposedly would go to a 700, Transunion to 688, and Experian to 695.

However, I don't know if what bad designation they put on the account will lower those simulated numbers.

Re: "Your Chase account is being managed by United Collection Bureau" uh...

Brian_Earl_Spilner — Fri, 30 Aug 2019 17:53:25 GMT

Ignore the simulators. You won't get that kind of jump until your reports are clean. If this is your only derogatory, it'll be 7yrs 6 mos from first default. If you have other derogatories, it may jump a few points or others have reported a score drop for some reason. The account will just show closed and at $0. They'll put in the comments it was settled which will only matter on a manual review by a lender. If you can't afford to pay in full, then settle, but again, if you want to get back with Chase in the future, you should pay in full. They may not give you another card, or they'll hold it over your head forever.

Re: "Your Chase account is being managed by United Collection Bureau" uh...

The_Rooster — Fri, 30 Aug 2019 17:55:55 GMT

@Brian_Earl_Spilner wrote:
Ignore the simulators. You won't get that kind of jump until your reports are clean. If this is your only derogatory, it'll be 7yrs 6 mos from first default. If you have other derogatories, it may jump a few points or others have reported a score drop for some reason. The account will just show closed and at $0. They'll put in the comments it was settled which will only matter on a manual review by a lender. If you can't afford to pay in full, then settle, but again, if you want to get back with Chase in the future, you should pay in full. They may not give you another card, or they'll hold it over your head forever.

I don't know why they even provide the simulators when they're worthless.

Chase has been reporting this at CO for nearly a year now, so I don't think the DOFD is going to change.

Re: "Your Chase account is being managed by United Collection Bureau" uh...

RobertEG — Sun, 01 Sep 2019 22:02:49 GMT

When a payment discharges a debt, regardless of whether it is paid in full or whether the creditor agrees to a settlement for less, the current status becomes Paid, and the current balance must be updated to $0.

The CRAs additionally, and optionally, permit a creditor or debt collector to also report the current status as Paid, with the addition of the special comment that it was settled for less than the full debt. That is at the reporting discretion of the creditor, and if used, informs others that the consumer did not pay their entire debt obligation. That is never a favorable comment, as it informs others that if they lend to you, they may take a loss, as you have a history of not paying your entire debt.

If a creditor agrees only to report Paid, with no reference to the additional fact that it was settled by acceptance of less than its full amount, that is substantial, as your credit report will then appear the same as if you had paid the entire amount.

Re: "Your Chase account is being managed by United Collection Bureau" uh...

Anonymous — Sun, 19 Jul 2020 15:28:36 GMT

@RobertEG wrote:
When a payment discharges a debt, regardless of whether it is paid in full or whether the creditor agrees to a settlement for less, the current status becomes Paid, and the current balance must be updated to $0.

The CRAs additionally, and optionally, permit a creditor or debt collector to also report the current status as Paid, with the addition of the special comment that it was settled for less than the full debt. That is at the reporting discretion of the creditor, and if used, informs others that the consumer did not pay their entire debt obligation. That is never a favorable comment, as it informs others that if they lend to you, they may take a loss, as you have a history of not paying your entire debt.

If a creditor agrees only to report Paid, with no reference to the additional fact that it was settled by acceptance of less than its full amount, that is substantial, as your credit report will then appear the same as if you had paid the entire amount.

Is there actually any legal documentation that this must occur? I settled a debt for less than the full balance (paid $2885 to settle a balance of $3606) with State Farm Bank concerning a charged off credit card. They are reporting the deficit of $721 as a balance on my CR to EF and EX (but not TU for some strange reason) and ALSO as a Past Due amount.

I have a letter from the CA that represented them (Sessoms and Rogers) that the account "has been resolved as settled in full for the total settlement amount of $2885." I just sent them a dispute letter outlining that I believe the balance should be zero and attached a copy of the settlement confirmation letter. I know I have to wait to hear back now but they were completely obstinate when I tried to talk to them about this on the phone and twice rejected disputes submitted online via EF and EX.

This one issue is causing me major frustration in working with mortgage brokers. I've been told I need to get it cleared up and should see a substantial score improvement.

Is there a way to get an account excluded from your credit report by mortgage underwriters if it's obviously in error and the normal dispute process isn't working?