My wife was in a serious auto accident in October 2012 and our car, which was leased, was declared a total loss by State Farm insurance. It took State Farm and US bank, who held the lease, about 5 months, to settle up. However, US bank never claimed it was owed money by us, nor were we sent to colelctions. I've verified this (today) with US Bank.
However, I am having a problem with FICO's score listing on this account, which is an "early termination/insurance loss". MyFico counts this as a delinquent account. I have spoken to account reps at MyFico 3 times now and they have confirmed that an early termination of a lease does, in fact, count as a negative on an account, in exactly the same way as a missed payment. When I view my MyFico score for free with my Barclay's credit score, it even says that the account shows "serious deliquency."
Interestingly, I have other accounts (like a home loan) that have terminated early (because I sold the house) and these accounts are simply marked as "closed" and are not considered negative. So, it seems that this pertains only to auto loans and/or leases that end early.
In addition, I have noted for MyFico that none of the credit bureaus list this as a negative account when they produce their own credit score. The credit bureaus do show this as an account with "early termination/insurance loss" but the accout has no red flas. MyFico is the only entity that considers this a red flag.
Is this a mistake? I've been researching this and can't find an instance where an insurance loss triggers a negative event. I can only find examples of people getting hurt when the lessor sends them to collections for not paying. That isn't the case here.
Any thoughts or assistance would be greatly appreciated!