Monthly Reporting of a CO?

[ANGEL99]

Hello, I have been making payments to a law firm (Messerli Kramer) on some debt that I was served on over two years ago.. the OC is a local credit union and they would have garnished me for sure given how aggressive this law firm is.. and the fact the debt is significant. I am curious if there is an angle to get the OC to stop reporting the the TLs as CO every month? Whenever I attempt to contact the OC they redirect me to Messerli who of course tells me they do not control how the OC reports. 

I have built back some positive credit but I question how much progress I can make with the CO dinging me each month. The DOFD on these accounts is 5/2015. But perhaps I do not want them to change the reporting as that could reset the clock?

Thanks!

[gdale6]

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@ANGEL99 wrote:

Hello, I have been making payments to a law firm (Messerli Kramer) on some debt that I was served on over two years ago.. the OC is a local credit union and they would have garnished me for sure given how aggressive this law firm is.. and the fact the debt is significant. I am curious if there is an angle to get the OC to stop reporting the the TLs as CO every month? Whenever I attempt to contact the OC they redirect me to Messerli who of course tells me they do not control how the OC reports. 

I have built back some positive credit but I question how much progress I can make with the CO dinging me each month. The DOFD on these accounts is 5/2015. But perhaps I do not want them to change the reporting as that could reset the clock?

Thanks!

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The clock for CRTP cannot be reset its set in stone from the OCs reported DoFD. By law the OC must report accurate info so they are proper in reporting as you make the payments and a side affect is a depressed Fico until it stops reporting and begins to age back in time. The only way that this wont hurt you is to get them to just remove the entire account from reporting with a GW deletion. These are hard to get but you can try. The other thing is to just settle it in one payment so it only reports the pay off as CO accounts paid off are to stop updating monthly.

[RobertEG]

Until you have fully repaid the entire delinquency amount, the account continues to have a current status of delinquency, which would be either a given monthly delinquency amount, such as 180+ late, or more broadly as a CO if they have taken that accounting measure.

Thus, they can legally continue to report delinquency, either as current status or as a record of prior monthly history under your payment history profile.

It is common in repayment agreements for a consumer to include provision that the creditor cease reporting of prior payment history for months where agreed payments were made.  If you did not formally include such terms in your repayment agreement, you can still make an informal good-will request of the credtior that they remove payment history reporting of derogatory status for months where you made agreed payments, but that would now be totally voluntary on part of the creditor.

Regardless, as stated by gdale, credit report exclusion of monthly delinquencies or of any reference to a charge -off is based ONLY on the time since initial account delinquency, and credit report exclusion is not affected by any issues of payment or delinquency status after intitial delinquency.

[ANGEL99]

Thx for the info..  

So essentially the CO could report as it does each month until 7.5yrs from the DOFD? I will try the GW but I am not too optimistic. I suspect FICO algorithms would have logic to know this intially went CO over three years ago and would have less of an overal impact as it ages, even with the recurring monthly reporting showing as CO. Maybe I am wrong.

I have also considered maybe trying to dispute some of these old collections\account that appear dormant.. but I am only half way through the SOL for my state.. Or let sleeping dogs lie?

[gdale6]

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@ANGEL99 wrote:

Thx for the info..  

So essentially the CO could report as it does each month until 7.5yrs from the DOFD? If its not paid off then yes. If you get a GW removal of it while still paying that is the best outcome.

I will try the GW but I am not too optimistic. I suspect FICO algorithms would have logic to know this intially went CO over three years ago and would have less of an overal impact as it ages, even with the recurring monthly reporting showing as CO. Maybe I am wrong. A credit history is just that, its the fact that the account had to go to CO status to get you to pay that is the reason it really hurts, you are still legally delinquent even though you are paying it off so Fico is going to see that info from what is reported from the OC or the CA and make its calculations based on that info. If the OC is reporting then as you pay it off your score based on utilization of the account is going to improve some.

I have also considered maybe trying to dispute some of these old collections\account that appear dormant.. but I am only half way through the SOL for my state.. Or let sleeping dogs lie?  You would need to have a valid basis to dispute and if its just to try and get the derogs removed if they update and the status date comes current, guess what is going to happen. Best way to approach paid derogs is with a GW letter.

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[RobertEG]

The "monthly reporting of a CO" could be under more than one field code, and thus its effect depends upon what the reporting refers to .... the current status, or a prior montly payment history profile status for prior months.

First, think of the reporting of a CO as being the reporting of a delinquency status, similar to reporting of, for example, a 180+ day late.

The difference is only that a reporting of CO generally states that it is seriously delinquent without stating the explicit number of days since first delinquency occured, such as 90/120/150/180 days.  The number of days since initial delinquency, however, can still be determined, as once a creditor has reported a CO, they are required to additionally report the DOFD to the CRA within 90 days thereafter.   Thus, it can be translated into an equivalent monthly delinquency with the days late being the current date minus the DOFD.

Second, the reported DOFD can be applied to either the current account status, or to prior historical delinquency status for prior months under the payment history profile.

If a reported update still shows the current status to be one of delinquency, such as 180-late or CO, then it has increased negative scoring impact, as does any increase in period of delinquency, such as from 60-late to 90-late.

However, if the debt has been paid, it is updated to $0, and the associated current status in any updated reporting is no longer any delinquency status.  It would update from, for example, currently seriously delinquent (CO) to paid.

Thus, once paid, any updates correct prior reporting, but no longer increase the period since initial delinquency, and thus do not further extend the scoring of account delinquency.  It is said to then be able to age in scoring effect.

Stated differently, the CO will remain under prior monthly payment history profile reporting, but the period of delinquency becomes frozen, and the period since initial delinquency increases, which together begins to reduce the negative effect under the scoring algorithm.

An additional benefit of paying a debt that was previously delinquent, such as under a prior CO status, is that if it is a revolving account, the current balance will also update to $0, removing it from your % util of revolving credit scoring.  If the % util was high, that can also lead to score improvement.

[ANGEL99]

Interesting.. so chasing these accounts that report as a CO each month really does me no good? I already took the largest hit by the TL becoming a CO anyway and I just have to try and get it removed entirely or let it age?

[RobertEG]

While paying a delinquent debt does not immediately improve score, it does permit some improvement in subsequent months or years.

Once paid, the account no longer has a current status of delinquency, and thus any updated reporting by the creditor only corrects other information, and does not report any continued delinquency.  Thus, the period of delinquency is not extended, and the prior payment history derogs begin to age in their scoring impact.

Contrasting that with updated reporting that the debt continues to have a current status of delinquency, such updating increases the reported period since initial delinquency, and thus increases, rather than decreases, the scoring impact of the deliquency.

Paying lets the derogs begin to age in scoring impact, while updated reporting with the debt left unpaid increases the negative scoring impact.

Thus, paying does have future scoring benefit under your payment history category.

[Queen_Etherea]

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I have also considered maybe trying to dispute some of these old collections\account that appear dormant.. but I am only half way through the SOL for my state.. Or let sleeping dogs lie?

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I have a collection account (medical for $1,600) that was reporting as CO/closed. I thought the DoFD was sooner than it was and so I disputed it. Now, the collection account is open, current, and reporting monthly. They kept trying to contact me at an address I haven't lived at in about 6 years so it showed as they couldn't find me or whatever. So when I disputed it, they were able to find my current address and even sent me a collection notice in the mail. I'm not sure how much it hurt my scores when this happened, but my scores did drop about 10ish points a month or so ago. Not sure if there's any correlation there, or if the drop was due to something else. All I know it's now reporting as current/monthly and I don't like it. EX should be removing it this month, and EQ in Dec. I would just leave it alone. No need to go poking those sleeping bears!