What does "Written off" mean?

[Anonymous]

I have a credit card that was charged off for $541 in February 2014. I set up a payment plan and paid it off in February 2015. It always reported to equifax as a charge off with a payment plan that was current. Starting in March 2015, after I paid it, it started reporting as a collection and now shows an unavailable balance and says in the notes "Paid. $541 written off". Is this how it should be reporting? The 541 written off sounds like I never paid it and now it's reporting as a new collection. I'm confused, can anyone explain this?

[Anonymous]

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@Anonymous wrote:

I have a credit card that was charged off for $541 in February 2014. I set up a payment plan and paid it off in February 2015. It always reported to equifax as a charge off with a payment plan that was current. Starting in March 2015, after I paid it, it started reporting as a collection and now shows an unavailable balance and says in the notes "Paid. $541 written off". Is this how it should be reporting? The 541 written off sounds like I never paid it and now it's reporting as a new collection. I'm confused, can anyone explain this?

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I don't think it should be reporting that way.

"Written off" is similar to staying they cancelled a portion of the debt. For example, if you have a debt that was $10,000, and agreed to a $5,000 settlement, it would report as $5,000 "written off". 

In your case, it should be reporting as a charge-off and paid. If you can prove you paid that money, I would dispute it. First off, it's non-sensical - they can't say you paid in one breath then in the next say they wrote off the entire balance; second, it doesn't look great on a manually reviewed loan application unless you have a very good reason for it.

[Anonymous]

One question, though. Did you make payments to the OC or did you pay an outside CA?

Sometimes, creditors will quickly write-off bad debt and send it over to a CA, which is a nasty 1-2 punch to consumers. You can get hit with a 1099-C and two negative entries. 

[Anonymous]

I would second that advice to dispute it, it forces the creditor to prove that it's a valid debt. I'm not a big fan of online disputing so I would do it over the phone or by snail mail.

[Anonymous]

It was paid to Elan Financial Services. The same company who provided the card (it was from a small local bank). So even when the account was current and paid as agreed it reported as Elan Financial Services.

[Anonymous]

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@Anonymous wrote:

It was paid to Elan Financial Services. The same company who provided the card (it was from a small local bank). So even when the account was current and paid as agreed it reported as Elan Financial Services.

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I'd dispute it. Rather than disputing with the bureau, call up the bank and explain the situation. They may have an easily remedied accounting error.

[gdale6]

I would send the bank a direct dispute if they are the ones reporting it.

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Direct-dispute/td-p/2309095

[Anonymous]

Written off is just an accounting term similar to being charged off.  It just means that the company has deemed it as uncollectible and they are taking of out of their books for accounting purposes.  It has no bearing whatsoever on the legal collectiblity of a debt. 

[RobertEG]

I agree with Rising_Scores.

It does not appear that a debt collector ever reported a colledtion.

The creditor did a charge-off, which is simply an accounting transaction they took at a prior point in time, wherein they declared $541 debt as not likely to be paid, permitteding hem to "write off" that debt as a business loss.  It does not mean they cancelled any portion of the debt, or that the consumer no longer owed it.

If the consumer then pays a debt that happened to have been charged-off, that does not alter the fact than they took that measure.

How they handle the subsequent consumer payment to them is their own internal accountng issue.  The consumer's credtit report will continue to show that the debt was charge to profit and loss (written off) unless the creditor voluntarily chooses to delete that reporting.  The consumer can always request the creditor to grant a good-will deletion.