"Paid by Insurance" is derogatory?!?!?

[Anonymous]

This issue may be academic, since the TL in question should not be on my CR anyway (it is from 1999, and if it is derog, then it should be gone - I'll probably dispute in the next couple of days).

Anyway, as I first mentioned here I totaled a car in late 1999 (gotta love LA traffic on Thanksgiving weekend), and insurance paid off my lease. I didn't think anything of it at the time (wasn't too knowledgeable about or concerned with credit scores).

When I recently was researching another CR issue/dispute, I noticed that this old account is listed as "derogatory" or "adverse" on my TU CR from some sources (i.e. from TU directly or from TC, but not via myFICO or PrivacyGuard.com). The CRs that indicate it as "derogatory" highlight the "paid by insurance" remark as the derogatory/adverse element. This TL is listed on EQ and EX *without* the "paid by insurance" remark (they say "pays as agreed" or some such remark).

As I said above, I'll probably just dispute it and get it removed from my TU report since it is so old, but why in the heck would a loan being paid by insurance be derogatory?!?! They got their money. I'm just curious if anyone has any thoughts on this one.

[Anonymous]

Just curious, does the acct in question have any type of balance???  I would dispute as past CRTP, and it should be deleted if DOFD was in 1999.

[Anonymous]

No lates, $0 balance, last Date Updated: 12/1999, Date Closed: 12/1999, Pay Status "Paid or Paying as Agreed".

Looking at it again, I noticed that the CR direct from TU (which I got from their website April 13, 2008) also has the notation:

"Estimated date that this item will be removed: 11/2006"

YEAH, RIGHT!

[Anonymous]

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BobSki778 wrote:
No lates, $0 balance, last Date Updated: 12/1999, Date Closed: 12/1999, Pay Status "Paid or Paying as Agreed".

Looking at it again, I noticed that the CR direct from TU (which I got from their website April 13, 2008) also has the notation:

"Estimated date that this item will be removed: 11/2006"

YEAH, RIGHT!

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 I would dispute via written letter or fax asap.  Hopefully CRA's won't get confused and do something stupid!!

Good Luck BobSki!!!

[Anonymous]

Back to the initial question of the thread, does anyone have any comments on why "Paid By Insurance" is derogatory in the first place? It just doesn't seem right/fair to me.

[Nectarine]

It may not necessarily be the 'paid by insurance' marker that's derogatory. If it's reported to the CRA by a CA, then it may just be the CA causing the derogatory.

If that's not the case, I'd write a complaint about this. It's really not fair to anyone involved, and could be illegal (or is at least unethical).

[Anonymous]

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@Nectarine wrote:
It may not necessarily be the 'paid by insurance' marker that's derogatory. If it's reported to the CRA by a CA, then it may just be the CA causing the derogatory.

If that's not the case, I'd write a complaint about this. It's really not fair to anyone involved, and could be illegal (or is at least unethical).

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There's no CA (collection agency) involved. This account was never delinquent or unpaid in any way. It *is* the "Paid by Insurance" that is the derogatory element. The CRA's own direct report has the following text (bold added by me):


ADVERSE ACCOUNTS:
The following accounts contain information that some creditors may consider to be adverse. Adverse account information may generally be reported for 7 years from the date of the first delinquency, depending on your state of residence. The adverse information in these accounts has been printed in >brackets< or is shaded for your convenience, to help you understand your report. They are not bracketed or shaded this way for creditors. (Note: The account # may be scrambled by the creditor for your protection).


and then under the account/TL in question:


Remark: >Paid by insurance<



I don't think it can get much clearer than that. The other report (same CRA - TU, just via a different merchant - TrueCredit.com), simply says the account status is "Derogatory" with no indication of what makes it derogatory (again, none of the traditionally "derogatory" events/characteristics ever happened or are listed for this TL on this CR).

[Nectarine]

Wow, that is so weird... Completely unfair

I'd write a complaint. That is ridiculous that they would make that (of all things) a derogatory record.

[Junejer]

Bobski, you stated that myfico doesn't show it as derogatory, correct? That's really all that matters. If you don't have a little flag next to the account on myfico, then don't worry about it.  If there is no flag, then it is being reported as a good TL, which will report for up to 10 years from closing (which will help your history).

The fako scores AND advice is good for a couple of things:

1). lining a bird cage

2). house breaking a pet

3). for toilet paper in case you run out

There are others, but this is family show.

[Anonymous]

I see what you're saying, Byrdman, and I agree that it's probably having a negligable, if any negative impact on my FICO score (may even be positive as you say). My "concern" is that the CRA directly (TU) implies that it's derogatory (really, it's more of a curiosity than a concern). If they provide lenders with the report in the same or similar format (though they do clearly state that they don't highlight the "paid by insurance" in the same way for lenders), then that may look bad in a manual review of my credit report (such as for a mortgage app), even if it doesn't have a negative impact on my FICO score.

I've got a couple other car loans on my reports that show absolutely no negative indications in any form from any report provider, so if there's even a chance that this one might have any negative impact, I'm going to dispute it and have it removed. Who knows, they may just delete the derogatory remarks and leave the TL listed (not holding my breath on that one, though)

Thanks!
Bob