For your situation, assuming you made no partial payments during the CO time period (explained below), the only thing you might be hit with is the additional 180 days for the CA if it went there. For others, below is some generic information for you on this subject.
A charged-off account can remain on your credit report for up to 7 years from the date the debt was charged off. Keep in mind that just because a creditor has written off your unpaid debt as a loss does not mean you do not still owe the debt for both collection and scoring purposes. Your creditor will likely sell your charged-off debt to a collection agency and that is another situation.
The collection agency can file a collection account. That type of account can remain on your credit report for 7 years plus 180 days from the date of the delinquency that immediately preceded collection activity.
These two statements simply mean that your creditor can charge off your debt at any time. It is important to remember that the date of the delinquency that immediately preceded collection activity is not the date you first went delinquent. Furthermore, it is not the date the creditor COed your debt; but the date you made your last payment – any type of payment on the account. The creditor can allow the debt to remain 90 days late (or greater) for as long as they like. They do not have to charge it off or send it for collection; but the 7-year clock starts from your last payment.
A common practice is to hound you with calls and ask for “something”. You see the progressive 30, 60, 90-days late on your report. You want to get this off and try to work with the lender. Let’s take a look at a bill. You did not make your payment in January. They call you and ask for something. You make a “plan” to pay partial payments for the next couple months. By April you are caught up but have another problem in May when you miss another payment. You make partial payments in June and July. Finally, the creditor is tired of dealing with you and simply charges-off your debt in September. You now have the CO on your data that stays there for 7 years from that Sept date when they COed you. After a few years, the creditor sells your account for collection. That new creditor can now list you as a CA for 7 years and 180 days (7.5 years) from the July date.
So now look at what you have. You have 7-years of two 30 days lates (one from Jan and one from May). You have two 60-days late (one from Feb and another from June). You have a three 90-days late (one from March, one from July and one from Aug). You have one 90-days plus late from Sept and a charge off from Sept. A few years later you still have all those things showing, but now you’ve added a collection account that can remain for 7.5-years from July. Sure things will fall off as they go on (first 30-day late first, etc.); but this is a long time. Also, it is possible for a CA to fall off long before a CO (depending on when the creditor does it).
The moral is – BE VERY CAREFUL WITH PARTIAL PAYMENTS, PAYING OFF COs OR DEFINITELY CAs. There are ways to do it right, but you could still be hit hard (score-wise) even if you paid your debt, once these are on your report (if you do it wrong).
Y
