CA letter from NCO financial

[zigouilleur]

Hi, I am in little bit of a pinch and this is my first post to this forum so hi to all.

I am currently in the process of buying a new home, and have already been approved by the bank, one of the conditions was off course to give a good explanation letter for the negatives on my CR (Collections account), which i did. The reason why i am writing today is because i just received a letter from NCO Financial about an old CC charge-off from Citibank i had. The item was on my credit reports in 2006 from Citibank itself but has dropped off at least 2 years ago. They are giving me standard language about having 30 days to ask for a validation for the debt and are offering to settle for 30% of the amount. I do not want to jeopardize my loan so i do not know what to do.Should i send them a DV letter? At this point they are not reporting to the CRs but if they do, i don't know if that will jeopardize my mortgage loan since i have not closed yet and won't do so until January. I am little wary of the best course of action so i am turning to you guys for some advice.

Thanks in advance for the help. 

[Anonymous]

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@zigouilleur wrote:

Hi, I am in little bit of a pinch and this is my first post to this forum so hi to all.

I am currently in the process of buying a new home, and have already been approved by the bank, one of the conditions was off course to give a good explanation letter for the negatives on my CR (Collections account), which i did. The reason why i am writing today is because i just received a letter from NCO Financial about an old CC charge-off from Citibank i had. The item was on my credit reports in 2006 from Citibank itself but has dropped off at least 2 years ago. They are giving me standard language about having 30 days to ask for a validation for the debt and are offering to settle for 30% of the amount. I do not want to jeopardize my loan so i do not know what to do.Should i send them a DV letter? At this point they are not reporting to the CRs but if they do, i don't know if that will jeopardize my mortgage loan since i have not closed yet and won't do so until January. I am little wary of the best course of action so i am turning to you guys for some advice.

Thanks in advance for the help. 

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Welcome! 

Just a quick question or 2.

Do you know the date of first default on the original account? You said that it fell off of the credit reports a few years ago so my guess is that it is past the SOL. Some collection agencies deal in junk debt and try to collect past SOL hoping they can intimidate you into paying money they have no legal right to collect. Check in the state you live in and find out what the SOL is. If it is past I would DV. If they respond to the DV send them a reply stating past SOL and demand cease and desist.

Some of the more learned folks on this forum may have other or additional ideas.

[RobertEG]

Being past SOL does not govern when a CA falls from your CR.

Look at the DOFD on the OC account that led up to this collection.  The CA can post to your CR for up to 7 1/2 years from that date. If they do post, it will hurt your FICO score until its drop off date.   The question is whether they can even post now.

Since this invloves a mortgage loan, I would suspect that you have already informed the mortgage lendor of the OC debt from which this stems.  If not, and it is an unpaid debt that they were not aware of, it wont be greeted fondly by the lendor.

DV may be the route to go, for once you DV, they must cease collection activity until such time as they choose to validate.  That includes reporting to your CR.  But if they do validate before January, that may spur them to post to your CR, which will make the mortgage lendor immediately aware of both the old, upaid OC account and the CA account, and tank your credit score.

The cleanest way is to accept their offer and pay it under their agreement not to post to your CR

Your decision.