Pay off OR not to Pay-off --- that is the question

[wkhan3513]

There was a CO for a BOA card, the date of first delinquency should be Mid 2010 (not mentionedi in the 3 bureau myfico reports)., whereas the last activity date is 03/2012 as seen in two of three bureaus reports.   The Seven year Mark (even conservatively looking at the last activity date) should be 03/2019.   The amt owed was apprx 600 on a 3000 limit card. 

Some history:

After delinquency, sometime in late 2012 this was referred to collection agency.... , and then moved over to other collection agencies.  In 2016, when I decided to get my life (and credit history) back on track... I used lexington law firm for a year, and they pummelled this bank and other banks (which had COs)... This helped in getting two bad accounts off my history... however, for BOA, the original creditor now shows the balance (not a CA) meaning the debt is not being held by a CA anymore.   Then recently, I started a bank account with BOA., after which I have started receiving settlement emails from them (they must got my email address from my bank account info), they want to settle it for 250 out of the original 600 owed.  

Question 1:  After a seven year period (prospectively in 04/2019), will this account completely drop off from the credit report OR will only the derogatory portions drop off from the credit report.

Question 2:  If I want to pay the settlement option OR pay-in-full,  will this activity have any impact on my Credit Report - Resetting my timeline (from 03/2012 to say 09/2018), as the date of last activity... and/or bringing back this card out of Charge Off., but still showing delinquency.  

Quetion 3:  If I dont settle (as part of strategy) before 03/2019., with the hope that its going to drop off my report in 03/2019....  From now (09/2018) till then (03/2019).... what can BOA do which will hurt me .... i.e. refer to collections again..... etc etc...

Thanks

[RobertEG]

Credit report exclusion of either a collection or a charge-off has a date-certain exclusion date of no later than 7 years plus 180 days from the date of first delinquency on the account with the original creditor.  FCRA 605(c).

The CRAs normally exclude a bit early, at approx 7 years from DOFD, but have up to the full 7 years plus 180 days to do so.

Any later date of any last activity is irrelevant, and is not used for determining credit report exclusion.

Since the DOFD alone determines credit report exclusion, the FCRA requires the creditor to separately an explicitly report the DOFD on their account to the CRA no later than 90 days after they report any charge-off, so it will be in your credit file.  FCRA 623(a)(5).

It is common for commerical credit reports not to include the reported DOFD.  You can normally obtain the reported DOFD by obtaining a full credit report from either annualcreditreport.com or directly from the credit reporting agency.

If your records indicate a DOFD of mid-2010, that would mean the charge-off would have become excluded before the end of 2017.

That indicates that the DOFD provided by the creditor was not mid-2010, but rather sometime after mid-2011.

After the CO becomes excluded, no reference to the charge-off can continue to be included in your credit report.

If the account remains unpaid at that point, it will also have adverse reporting in the form of a current status of continued delinquency.

The additonal mandate of FCRA 605(a)(5) requires the CRA to exclude any other form of adverse information reported by the creditor, such as a current delinquency status, no later than 7 years after delinquency commenced.  Thus, if the account remains unpaid, it will be excluded by the CRA in its entirety when the exclude the reported CO.

Paying or not paying has no effect on the DOFD, and thus no effect on credit report exclusion of reported derogs.

Stated differently, it will not "reset" the required credit report exclusion date(s).

The credit report exclusion provisions that apply to the charge-off also apply to any reported collection.

More specifically, any collection, regardless of when reported, is subject to required credit report exclusion at the same time as a CO reported by the creditor, which is no later than 7 years plus 180 days from the same DOFD.