Is this correct to report it like that?

[golo]

Hi brothers and sisters in FICO.I have a situation that i would love to get some insight,i've been trying to get an input to no avail.Here i go,it's brief, i have an OC that replied to me after i disputed it by 623 states that they open an installment account when they charge off and close a credit card that i defaulted,basically that instead of report it as a collection they report the TL as an installment.That is their explanation after i inquired about why are they reporting an installment when i never had an installment account with them,only a credit card.Thanks in advance.

[RobertEG]

Its incorrect reporting.  The type of credit you had/have with them is based on the terms of your account agreement, not their internal accounting of moving the debt from a receivable asset to a non-receivable bad debt.

I would submit a dispute to the CRAs for improperly reporting the type of credit based on the unrelated act of charging the debt as a business loss. 

[llecs]

OP, you wouldn't want them to report as a CC. If I had that, I'd leave it alone (other than repair to get it off).

[golo]

So,reporting as a charge off is not as bad as a collection? If so,I'll take that,but didn't they report incorrectly by reporting the CO as an installment instead of a collection,when it was not an installmet account?

[llecs]

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@golo wrote:
So,reporting as a charge off is not as bad as a collection? If so,I'll take that,but didn't they report incorrectly by reporting the CO as an installment instead of a collection,when it was not an installmet account?

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Both an installment CO and a CC CO are scored the same. However, depending on the reporting, and assuming this is unpaid, some CC COs still factor into CC util. The last thing you'd ever want is for them to update the reporting to a CC and have this negatively hurt your overall util. There'd be a significant score ding if factored in once coded correctly. ETA...outside of FICO, I'd rather have a CCC review my CR and see that I'm free of CC COs. Even though the ding is the same, if you can get away with them reviewing it an installment vs. a CC, then all the better for your approval odds.