Charge off

[Anonymous]

Hello, trying to get a USDA loan. I have a charge off that was charged off back in June 2018, I paid it off in April 2020 now that I’ve paid it off it’s showing 90-120 late payments all the way from the charge off In 2018. I’m thinking this will cause me to be denied. Oh and it's still showing charged off even though it was paid in full. Anything I could do? This is inaccurate right?

[Brian_Earl_Spilner]

Paying a charge off simply sets the balance to 0. A couple of things happen, it stops updating and hurting your score more as it ages off, and it's no longer being factored in your utilization. The info is correct and the only way to get it off is to request a goodwill removal by the creditor.  Showing it paid off is a lot better come loan time, especially if it was paid in full, than if it wasn't.

[RobertEG]

Are you saying that it continues to report a status of CO in your payment history profile and/or your current status for months after you paid the debt?

If so, that would be inaccurate.  Current status and payment history profile for prior months becomes a non-delinquency status once paid.  A reporting of CO is, under the credit reporting manual used  by the CRAs, a delinquency status.  Once paid, it becomes Paid, or Settled for less, which are non-delinquency status, and thus do not continue to report extension of the period of delinquency.

Can you clarify....?

[Anonymous]

It was charged off in June of 18. I paid it in full April 2020. The creditor updated all months from June 2018 until April 2020 as if I was 90-120 days late with payments making it look as if there were recent late payments. USDA guidelines states that you can't have any late payments within the last 12 months.. in which there wasn't any late payments I just paid the charge off. I hope this is a better understanding lol

[Anonymous]

@Anonymous They can choose to mark it 30 days late, 150 days late or CO all the way up until it is paid.

And that is accurate because until you paid it, it was well over that many days due correct? From my count, it was about 22 months late, So putting a 90 or a 120 is actually reporting more mildly for you, they could’ve put CO all the way to April 2020.

The payment history should show charge off and the current status should show paid.