Charge off question/DTI

[betterdays2011]

We are looking to buy a new car soon.  I was just double-checking all my accounts on my most recent credit report when I noticed an account that was charged off two years ago had "not reporting" rather than "charged-off" and the monthly payment was still showing.  The account was sold and I have been paying the collection agency directly.  The issue is that without that monthly payment our DTI is 35%, but if that payment is added in our DTI jumps to 39.64%.  

How do you think a credit union or other lenders will look at this?   I am going on the assumption that debts that our charged off are not usually included in the DTI calculation.

Thanks in advance.

[Anonymous]

I cannot comment on what financing will do, but thought I'd chime in from my current experience on charge offs. Speaking with a credit union loan officer, I was told they do definitely factor into your DTI, as a charge off still shows a balance due. This balance due still shows up as a revolving credit balance, thus it needs to be paid monthly. 

YMMV and don't take this as gospel, this is just what I was told. Maybe someone with better experience can offer some advice.