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Credit cards showing balances and reading "charged off," I paid collectors

MoreCowbell
Established Member

Credit cards showing balances and reading "charged off," I paid collectors

I had two small Barclays card chargeoffs in 2014. I had just gotten a job when they charged off, and I paid the two collections immediately in full. I'm just looking at my credit report trying to make sure things are correct, and Barclays has the two accounts with balance amounts ($529 owing on a $250 credit card, and $808 owing on a $500 card) and saying "Charged Off Account." It seems to me, from reading here, that they should at least be reporting zero balances even if they still say "Charged off." Is that correct? There's no record of the two collection agencies that I paid. 

 

I'm not sure whether I should (1) ask Barclays to report zero balances, and I will show them proof that I paid the collections (I hope I can get those checks from my online banking without knowing the collectors' names); (2) ask Barclays to report zero balances and just say that I paid the collectors, without proof; (3) dispute the Barclays accounts because the amounts are wrong, without telling Barclays that I paid them in collections; (4) dispute with Experian, the report I'm looking at. 

 

If anyone has any ideas, I'd be very grateful. 

 

eta: I just checked my bank and I can only search within online transactions for about a year and a half. I know they're required to keep copies of my checks, but I'd have to request several months of them to try to guess when I paid this debt. So I think that option (1) isn't feasible. Further, I checked out credit karma for my transunion report and they both show there as "Charged off as bad debt," with the amounts showing. 

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1 REPLY 1
RobertEG
Legendary Contributor

Re: Credit cards showing balances and reading "charged off," I paid collectors

The reported charge-off relates to payment history, and will remain in your file and continue to affect scoring under payment history regardless of payment of the debt.

The question relates to reporting of current balance, which is unrelated to the fact that they did or reported a charge-off.

 

The creditor is required under FCRA 623(a)(2) to prompltly update their reporting of both current status and current balance.

How that is done depends upon whether or not the creditor still owned the debt at time of your payment, or whether they had sold the debt, and thus the debt collector was the current owner.

 

If the creditor still owned the debt, which is apparently the case, they are required to promptly update the current balance to $0 and the current status to paid once they are aware that you have paid the debt.  The debt collector, acting as the assigned agent of the creditor, was required to promptly terminate their collection activities and notify the creditor that the debt was paid upon receipt of your payment.

While the process of notification by the debt collector to the creditor that the debt was paid may result in some delay, in the creditor then reporting update to the CRAs, the "promptlness" standard of section 623(a)(2) would reasonably require update in their next regular reporting cycle after notice of payment.

I would consider anything more than two reporting cycles to clearly not meet the promptness standard of FCRA 623(a)(2).

 

If the creditor sold the debt to the debt collector prior to your payment, then the creditor was required to promptly report a $0 balance at the time of sale.

Thus, there would be no additional delay based on any need for subsequent notification from the debt collector that the debt was paid.

Update to $0 balance would already have been required.

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