Repeated charge-offs keeping score down

Flossininmy64 — Tue, 28 May 2019 17:01:46 GMT

From what I understand, the longer a negative item stays on your report, the less it affects your credit. My problem is that the lenders that I owe keep reporting a charge-off every so often keeping my score down. Does it only affect paid accounts less often and not active accounts? Any information you can give me would be helpful. Thank you!

Re: Repeated charge-offs keeping score down

RobertEG — Tue, 28 May 2019 17:26:28 GMT

It is not correct that derogs have declining scoring effect as the period of delinquency increases.

It is just the opposite.

A common example would the reporting of a 90-late after reporting of a prior 60-late.

The period since initial delinquency has increased, and thus the scoring impact is more negative.

The updated reporting increases the period of overall delinquency, and reduces any period since last reporting of delinquency status to 0.

A creditor is permitted under CRA reporting to report the current monthly delinquency status either in the format of days of deliquency, such as 150-late, or if the delinquent debt has additionally been subject to a charge-off accounting action, as CO.

Reporting status as CO is not their reporting that they have taken a new charge-off, it is reporting that the account remains delinquent, and that it has also, at some prior time, been subject to a charge-off. A creditor is required to also provide the date of first delinquency to the CRA when they report having taken a CO, and thus use of alternate reporting of current status as CO states that the account remains delinquent, with the period of delinquency then determined by the time since DOFD.

Thus, reporting of CO current status, or CO under prior payment history profile, is totally acceptable, and extends the period since initial deliquency, and thus negative scoring impact.

Once you pay a debt that was previously delinquent, the current status is no longer reported as delinquent, but rather updated to show paid, and thus the prior delinquency period ends, and the scoring impact can then begin to age.

Stated in terms of the language used in the post, a negative item begins to have less affect on your scoring once paid, but not if it remains unpaid.

Re: Repeated charge-offs keeping score down

Flossininmy64 — Tue, 28 May 2019 18:44:38 GMT

RobertEG, Thank you very much!

topic Re: Repeated charge-offs keeping score down in Rebuilding Your Credit

Repeated charge-offs keeping score down

Re: Repeated charge-offs keeping score down

Re: Repeated charge-offs keeping score down