Debt "drop off"

[jonjohn]

I have a medical bill that was unpaid. When I look at my credit report, it says it is "scheduled" to drop off in Feb 2012. People keep telling me to just let it "drop off". If you make a payment, it will stay on there for another 7 years. However, I recently read that things will drop off 7 years from the first delinquency????? Anybody know???

[jonjohn]

I am unsure whether I should pay the $87 fearing that the small amount will hurt me for years to come or let it "drop off"

[llecs]

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@jonjohn wrote:

I have a medical bill that was unpaid. When I look at my credit report, it says it is "scheduled" to drop off in Feb 2012. People keep telling me to just let it "drop off". If you make a payment, it will stay on there for another 7 years. However, I recently read that things will drop off 7 years from the first delinquency????? Anybody know???

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Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

Paying it will not lead to its reporting for another 7 years. The FCRA is clear in that a baddie like this will stay for 7-7.5 years from the DOFD of the debt. Paying any bad debt will not reset the DOFD.

Now pay it if you feel you owe it. You can also be sued for it too if your state's SOL had not expired, though it's highly unlikely they'd sue for $87. If it were me, I'd wait until it falls off and then I'd pay the doctor, not the CA.

[jonjohn]

Thank you for your response. So, just to clarify what you said. If I pay it, it will still drop off in Feb? My dilema is this. My lease is up on my Trail Blazer and I must turn it in or purchase it by the end of March. I am afraid that if that is still there it will hurt me. My Fico Score is 641 as of Dec. Yet, my Transunion on their site is 667???? I don't get it... LOL

[llecs]

Right, NOTHING can change the DOFD. It'll still drop off as scheduled and that drop off date is based of the DOFD. It doesn't matter if you pay it, they sell it, etc. Now the drop off dates that you find on your TU and EX reports are estimates only. I've had baddies change that drop off date by a month or two (EX is notorious for this). YMMV. Look for any change to occur on the first of the month.

The TU score on their site isn't a FICO score. It is a FAKO called a VantageScore. That score factors in stuff that FICO does not and vice versa. Also, FICO ranges from 300-850 whereas Vantage is from 501-990. Only a very tiny rare few lenders actually use that score. I don't know of any car lenders that use it.

I will add  on the FICO aspect that if you apply for the car, the score will very likely be different than the 641 you just pulled, assuming that lender pulls TU. Many car lenders will use an automobile-enhanced FICO which is different from the score pulled here. It'll weigh your past car purchasing experience over all other items on your CR.

[pizzadude]

Even if you were to pay the collection now, it would not improve your FICO score and it might actually ding your score when/if the TL is updated as paid.

The best scenario would be to offer a PFD such that it is completely removed from your CR. If the CA won't agree then I would just leave it alone and let it fall off your reports in 2 months.

[jonjohn]

Pizzadude,

Funny thing is I did just that last night. I used an example letter I found on here. Hopefully that will work. That is the only thing I have on my credit report that is bad. I have made consistent on-time payments for almost 2 years. I would like to see that gone. Thanks everyone for your help and suggestions...

[RobertEG]

Debt does not "drop off."  Accounts dont "drop off."

What "drops off" under one or more of the subsections of FCRA 605(a) are adverse items associated with an account.

What the FCRA prohibits is the for a CRA to continue to report adverse items after the dates specified.

When a debt is unpaid, various types of adverse items associated with the debt are reported to the CRAs, such as monthly delinquencies in payment, a charge-off by the creditor, or a collection reported by a debt collector.  These adverse items have set dates after which they can no longer appear in your CR. 

The account can continue to report after various adverse items that occured along the way are excluded from your CR.  Accounts are deleted only if a deletion is reported by the furnisher of the account information.

DOFD is not the universal date for CR exclusion.  Monthly delinquencies are not based on DOFD.  DOFD only applies to the date of continued inclusion of either a charge-off or a collection in your CR.  Monthly delinquencies each have their own separate CR exclusion date that is based on its individual date of occurance, and expire 7 years from the date of the delinquency.  When a debt is charged-off or placed for collection, the CO or a collection reported by the debt collector can only remain for 7 years plus 180 days from the DOFD on the OC account.

There is nothing in the FCRA that prevents an account from continuing to appear in your CR after any set period. There is also nothing in the FCRA that prevents a creditor or debt collector from continuing to report information after the CR exclusion date of any adverse item.  It is the job of the CRAs to monitor those dates, and block the reported information from inclusion in any credit report they issue after the exclusion date of the adverse item.

None of the credit report exclusion dates, except for unpaid tax liens, have an exclusion date that is pegged to a date of payment.  Paid or unpaid, adverse items associated with the account drop from the date of occurance of the adverse item, or the DOFD for a collection or charge-off, or the date paid for a tax lien.

For the unpaid medical bill, what will drop are any of the various derogs and delinquencies reported on the account.

[MarineVietVet]

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@pizzadude wrote:
Even if you were to pay the collection now, it would not improve your FICO score and it might actually ding your score when/if the TL is updated as paid.

The best scenario would be to offer a PFD such that it is completely removed from your CR. If the CA won't agree then I would just leave it alone and let it fall off your reports in 2 months.

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This doesn't apply to collections. Since HTSU explains things MUCH better than I can I will C&P this from one of her posts:

 Collections are scored off the date of assignment, not the DOLA. A change in DOLA shouldn't affect the score. .

This is such a common belief that we're trying to find examples with before-and-after reports where it happened, in order to see what's going on. If either the CA or the CRA is handling the data incorrectly, it needs to be corrected.

Here's a thread discussing this: Settle or Pay in Full?

Again, I'm not saying that it doesn't happen, but it's not supposed to, if the CA is reporting correctly and if the CRA is putting the info into the correct data fields.

From a BK years ago to: EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774
"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

[LS2982]

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@llecs wrote:

Right, NOTHING can change the DOFD. It'll still drop off as scheduled and that drop off date is based of the DOFD. It doesn't matter if you pay it, they sell it, etc. Now the drop off dates that you find on your TU and EX reports are estimates only. I've had baddies change that drop off date by a month or two (EX is notorious for this). YMMV. Look for any change to occur on the first of the month.

The TU score on their site isn't a FICO score. It is a FAKO called a VantageScore. That score factors in stuff that FICO does not and vice versa. Also, FICO ranges from 300-850 whereas Vantage is from 501-990. Only a very tiny rare few lenders actually use that score. I don't know of any car lenders that use it.

I will add  on the FICO aspect that if you apply for the car, the score will very likely be different than the 641 you just pulled, assuming that lender pulls TU. Many car lenders will use an automobile-enhanced FICO which is different from the score pulled here. It'll weigh your past car purchasing experience over all other items on your CR.

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+1