Question for credit experts

Anonymous · ‎09-24-2010

Hello experts,

I have a question.

I cosigned for a vehicle for my friend in 2004 (I know, bad mistake - learned a good lesson - will not happen again). Anyways, he got into an accident and moved and toyota motors came after me for the balance. My friend wasn't aware (so he says) about the insurance company trying to reach him because he moved while this was happening and he never got the letters in the e-mail.

Anyways, I made sure my friend paid off the balance immediately to toyota motors and that was that.

After checking my Fico score, I still see that account in my account (dates back to 2004) as an "Account with negative indicators".

My question is -

1. will this ever go away and stop affecting my credit score?

2. if so, when?

Thanks!

Anonymous · ‎09-24-2010

@Anonymous wrote:
Hello experts,

I have a question.

I cosigned for a vehicle for my friend in 2004 (I know, bad mistake - learned a good lesson - will not happen again). Anyways, he got into an accident and moved and toyota motors came after me for the balance. My friend wasn't aware (so he says) about the insurance company trying to reach him because he moved while this was happening and he never got the letters in the e-mail.

Anyways, I made sure my friend paid off the balance immediately to toyota motors and that was that.

After checking my Fico score, I still see that account in my account (dates back to 2004) as an "Account with negative indicators".

My question is -
1. will this ever go away and stop affecting my credit score?
2. if so, when?

Thanks!

Hello and welcome to the forums.

Until the experts arrive you'll have to put up with me.

What kind of negative indicator are we talking about? Late payments, charge offs, collections, etc.?

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

Anonymous · ‎09-24-2010

Hi, it states - Payment after charge off/collection.

Basically it went to collection and my friend wasn't even aware of it... but he paid it off as soon as he found out so no balance remaining since Dec 2004.

Anonymous · ‎09-24-2010

@Anonymous wrote:
Hi, it states - Payment after charge off/collection.

Basically it went to collection and my friend wasn't even aware of it... but he paid it off as soon as he found out so no balance remaining since Dec 2004.

Ah that helps. To know how much longer this will report you need to know the DoFD (Date of First Delinquency). That date is the only one used to determine how long this will remain. There are different opinions about this.

I’ve found at least three views:

1. It is 7.5 years for both charge offs and collections.
2. It is 7 years for a collection and 7.5 years for a CO.
3. All accounts in CO or collection will come off after 7 years.

In any case it will NOT stay longer than 7.5 years from the DoFD that led to the CO.

Reports from third party sites (including myFICO) often don't have the most complete information. If you pull your free reports from annualcreditreport.com Experian and Transunion will have the drop off dates. The Equifax report will show the actual DOFD.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

Anonymous · ‎09-24-2010

thanks that helps!

Anonymous · ‎09-24-2010

You are most welcome.

RobertEG · ‎09-24-2010

As marinevet has stated, the drop off date for collections and charge offs is a bit confusing.

This came about because, prior to 1996, the statute controlling drop of collections and charge offs was only FCRA 605(a)(4).

All that section 605(a)(4) says is that collections and charge offs drop when the account antedates the credit report by more than 7 years. No specific date was specified, leading to much confusion.

Congress amended the FCRA in 1996 in order to clarify the issue. However, rather than rewriting section 605(a)(4), they added a new section 605(c) which amended section 605(a)(4) by specifying the relevant date as being the DOFD on the OC account. But rather than just saying that the 7 year period ran from the DOFD, it states that the 7 year period runs beginning 180-days after the DOFD. So there are two sectons pf statute. which if read separately, seem to say either 7 or 7 1/2 years.

But in actuality, section 605(c) amends section 605(a)(a)(4), and the two, when read together clearly set the drop off date at 7 years plus 180-days from the DOFD.

Of course, nothing in the statute prevents the CRA from dropping the CA or CO earlier. If a CRA programs its drop off date at 7 years from the DOFD, that is OK.

However, if they choose not to delete until 7 years plus 180-days, that is authorized.