Help me to understand...Settled Charge-Off

[A1Credit]

I settled with Macy's regarding a charged off account that I owed.  We agreed on a settlement amount but when they updated on the credit reports they reported the remaining balance which was the difference between what I owed and the settlement.  This action caused a 26 pt drop to my score.  Can someone tell me why they didn't zero out my account when I paid the agreed upon amount?  

[RobertEG]

First, make sure you are looking at the current balance, and not the recording of the CO amount.

Creditors report and your credit report retains the reported amount of the debt at time of charge-off.

If you are sure that the current balance has not been updated, be aware that it is very common for creditors to first update the current balance by reducing the balance by the amount of the payment, and then a bit later zeroing out the balance based on their acceptance of the payment as settlement.

Their accounting department will often first process the payment, and then it will get reported thru their automated system.

It is then not until it reaches their final credit reporting review that the settlement is acknowledged, and the debt balance then reported as $0

Give it at least one and a half monthly reporting periods before disputing.

[A1Credit]

Account 3 of 7

Profile

COMPANY	MacY's/Dsnb	MacYs Department Stores	McYdsnb
LOAN TYPE	Charge Account	Charge Account	Charge Account
ACCOUNT NUMBER	XXXXXXXXXXXX	XXXXXXXX	XXXXXXXX
ACCOUNT HOLDER	Individual	Individual Account	Individual
DATE OPENED	Dec, 2007	Dec, 2007	Dec, 2007
Status STATUS DATE Feb, 2017 Feb, 2017 Feb, 2017 CONDITION Open Open Open LAST ACTIVITY Apr, 2013 Feb, 2017 Not Available BALANCE $598 $598 $598 STATUS Charge-off Charged off as bad debt Unpaid balance reported as a loss by credit grantor

[A1Credit]

It's being reported like this.  It states that the current balance is $598. The settlement was made and paid in February.

[RobertEG]

If final credit reporting update was not done during their February reporting cycle, then it could sit dormant until review during their March reporting cycle.

March is still upon us.

I would wait until April, and then call them and begin with an informal inquiry to their rep in their credit reporting department.

[A1Credit]

Thank you, RobertEG.

[Erick12]

I've twice settled an account with an OC, and both times they refused to update the balance. I waited several months, called multiple times, and was actually told that it would never update to a zero balance, which is obviously wrong. Got the CFPB involved and got a prompt update and apology from a higher up each time. Still debating calling a lawyer to sue since there are about 4 extra months where the account is listed as delinquent rather than paid off with no updates.

Oddly enough, I've never had a problem with a CA updating to zero balance, and they're supposed to be the shady ones.