One last baddy - Charge-Off help!!

[Anonymous]

Hey everyone, I have one last negative item on my credit report that I would like to get cleaned up, but not sure how I should proceed. I was involved in an accident which my vehicle got totalled out and I didnt gave GAP insurance. Long story short, I was left with a balance of $7,000, and I couldnt afford it, and its with Santander which I know can be a PITA.

The account was last updated on 7/18 as a Charge Off/Charged off as bad debt/unpaid balance reported as a loss by credit grantor.

I am now in a position where I have some cash to try to clean this up. Pay in full? Settle for less? How should I proceed?

Thanks

[RobertEG]

What was the date that you initially became delinquent on the debt, after which the debt remained delinquent up to the time of their taking of the charge-off?

The date of last updated reporting only extends the reported period of delinquency, it does not establish when the CO must become excluded, and does not usually effect the statute of limitations status for their bringing of civil action.

You need the DOFD in order to evaluate both credit report exclusion and SOL expiration.

Can you provide the DOFD?

[Anonymous]

2/17 was the last reported payment. 

3/17 - 30 days late

4/17 - 60 days late

5/17- 90 days late

6/17- CO

[RobertEG]

Reporting of a 30-late having occured in 3/2017 implies that the account first became delinquent in 2/2017.

Reporting  of a 30-late means that the account has been delinquent for at least 30 days.

That implies your DOFD was 2/2017.

However, payment history profile reporting cannot always be relied upon to establish the actual date of first delinquency.

Creditors are not required to report a 30-late for the exact month when the account first reaches 30-late.  They can, and often to, wait for several months to first report account delinquency to a CRA, and sometimes elect to skip a 30-late and first report when it reaches a higher level of delinquency, such as 60 or 90 days late.

For those reasons, the FCRA requires a creditor to separately and explicitly report the actual date of first delinquency to the CRA, separate from what has been reported under your payment history profile.  See FCRA 623(a)(5).

The CRA then uses that separately reported to determine credit report exclusion of the CO, and does guess at the DOFD by reference to use of the payment history profile of reported prior delinquencies.

[Anonymous]

Robert thanks for the reply. I apologize but im not sure I follow you. What are you suggesting?

Thanks.

[RobertEG]

That the DOFD is likely 2/2017.

However, it is possible that it was earlier if the creditor delayed in first reporting of delinquency to the CRA.

Check your detailed report from annualcreditreport.com, which should provide the actual DOFD that was separately reported by the creditor.

That will be the DOFD that will be used by the CRA.

It will likely also show DOFD as being 2/2017.

[Anonymous]

I understand. So basically it wont fall off my report for another 6 years?.. do you have any suggestions on how I should proceed?

Thanks

[RobertEG]

The usual step is to offer the creditor what is known as a pay for deletion (PFD) offer, which offers to pay the delinquent debt in exchange for their agreement to delete any reported derogs, of to delete the entire account.

You send them a PFD offer before paying anything.

If they agree, you then have a binding contract agreement, and they must then delete once you pay the debt.

That then removes the scoring impact of the CO.