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I have a credit card that was charged off two years ago and sold to a collection agency. I accepted a settlement offer from the collector and paid it (the settlement) off. The card still reports monthly as "CO" so my report for 2022 looks like:
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
CO CO CO CO CO CO CO CO CO CO CO CO
I understand that the charge off will stay on my credit record for 7 years. Is that 7 years from the date of the original charge off or 7 years from the date the settlement was accepted and fully paid? When will it stop reporting monthly as charged off? Since the debt was sold two years ago can I dispute the continued monthly reporting of CO by asking the creditor to prove they still owned the debt?
Welcome @JJ64
When did you settle it? Once settled. It should stop reporting and state Paid CO. Settled for less than amount owed. Is it all 3 CRA's or just one.
It was charged of about 2 years ago. I settled it over a year ago. I paid the final payment to the settlement company last month. I am pretty sure that the debt was sold to the settlement company before it was settled and was no longer owned by the original creditor
Pull your annualcreditreport and what does the final comment say? Call the OC and ask that they fix the monthly updating that it was satisfied. It should not be reporting monthly after that date. If not. File a dispute and send in copies of your final payment/reciept that its paid. The CO status will stay. But the monthly should stop and be removed.
I appreciate the answer but I'm not sure you understand my question so I want to be more clear. There are four distinct dates:
1) date of initial charge off by original creditor
2) date of sale of debt to secondary creditor
3) date of accepting settlement from secondary creditor
4) date of completing settlement with second creditor
Which of these dates demarcates the 7-year rule? I had assume it was the date it was first charged off, if not and it's 2,3, or 4 then this will be on my record for 8 or 9 years+
When the original creditor sells the debt in the secondary market can they continue to report it monthly as a charge off and if so for how long? My understanding was they need to own the debt to report. If they have sold it they wouldn't own the debt anymore.
It's not about whether it shows as settled right now. The issue is the original creditor has continued to report it monthly as CO for the last two years even as I have progressed through the steps enumerated by the list of dates above. Is this normal practice or do I have a creditor who no longer owns the debt but is reporting it as OC after they have sold it.
It is the date of the event that led to the chargeoff I believe. So before the charge off, there was probably a 30/60/90/120/(and possibly 180) day late string. It should start with the first 30 day late right before the chargeoff of the original creditor.
@ForwardLooking wrote:It is the date of the event that led to the chargeoff I believe. So before the charge off, there was probably a 30/60/90/120/(and possibly 180) day late string. It should start with the first 30 day late right before the chargeoff of the original creditor.
This ^^^^ The first 30 day late that led to a CO status.
If I'm not mistaken it goes like this;
Lets assume you opened the account december 2015 and was first positively reported January 2016. Then the following happened:
January February March April May June July August September October November December January February (CHARGE OFF)
In the example above the creditor marked charge off in February after 120 days consecutive late, so in that case October which was your first late that led to the charge off should be that 7 years starting point.
@JJ64 wrote:I appreciate the answer but I'm not sure you understand my question so I want to be more clear. There are four distinct dates:
1) date of initial charge off by original creditor
2) date of sale of debt to secondary creditor
3) date of accepting settlement from secondary creditor
4) date of completing settlement with second creditor
Which of these dates demarcates the 7-year rule? I had assume it was the date it was first charged off, if not and it's 2,3, or 4 then this will be on my record for 8 or 9 years+
When the original creditor sells the debt in the secondary market can they continue to report it monthly as a charge off and if so for how long? My understanding was they need to own the debt to report. If they have sold it they wouldn't own the debt anymore.It's not about whether it shows as settled right now. The issue is the original creditor has continued to report it monthly as CO for the last two years even as I have progressed through the steps enumerated by the list of dates above. Is this normal practice or do I have a creditor who no longer owns the debt but is reporting it as OC after they have sold it.
None of the above. It's the month of your first missed payment that led to the CO that starts the 7 year clock.
As for the CO reporting monthly, are you sure the OC did indeed sell the debt? Or did they merely hire a collection agency to help them collect? Because there's a big difference. If the OC sold it, then yes, they MUST update their TL to reflect a zero balance and monthly updates must stop. If, however, they DIDN'T sell and only enlisted the help of a third-party CA, then they can continue to report CO every month until the debt is settled/paid in full. If this is the case, then this would explain why they've still been reporting CO every month until you made your final payment.
If I remember correctly, it should report from first date of deliquency, which is generally from the OC, not the CA.