Recently paid CO dropped EX FICO 8 by 39 points!

[Anonymous]

Maybe we can get an opinion from @RobertEG? As far as I am aware, both types of reporting are acceptable but if anyone knows for sure, it would be him. 

[sjt]

Is it possible that there were no monthly updates since it was charged off and the decrease happened when it was updated with payment in April.

[Vu]

---

@sjt wrote:

Is it possible that there were no monthly updates since it was charged off and the decrease happened when it was updated with payment in April.

---

Absolutely.  If there were no monthly updates for a while, the OP score might have started to increase over time since the last negative payment reported.  Any new fresh negative payment will ding the score.

What I am arguing is that the creditor has choices of reporting the following data accurately:

1. Update the account as Paid with no new payment data for any month after the account is Paid.

2. Update the account as Paid, with all the correct data, including updating the payment history with any accurate negative payment history up until the month the balance is Paid.

3. Update the account as Paid with new payment data for 1 month after the payment is Paid, and the new payment data should only be Current as there would be no balance remained to be paid for the previous month.

The creditor should not be allowed to report any negative payment history any month after the balance is Paid because how can there be any negative payment when there is not a balance for the cardholder to be pay?

[Anonymous]

Vu OK, So, I made some incorrect assumptions. I’d like more information. On your first two accounts you said they updated it monthly all the way through March. What was the designation that they updated it with? Was it ever actually charged off and was a CO put there? Or is there simply a number designator? Anyway I totally agree that they kept them updated and when they updated it to paid that reflected a better situation and increased your score.

Again I’m definitely new to this but my understanding is the chain of delinquency begins with a DOFD. Consequently the only relevant dates are the DOFD that tells you when it begins to age from so you know when it has to be removed, and secondly the date if and when it is paid.

The longer ago that you paid it, the less impact it will have. I have no idea if the length of time it was delinquent has any effect. But I will tell you this, it’s still a charge off six months from now.; the difference is, it’s a charge off that’s been paid.

As Robert was telling you, a charge off is a bookkeeping designation and when they moved it from one side of the bookkeeping table to the other, it made it a charge off. That’s a historical fact that will never change. The difference is it was paid. They can no longer report a balance or report it as unpaid after March. That doesn’t change the fact that it’s a charge off it is and will always have been a charge off that’s not changing by you paying it. In other words as long as they do not report a balance or reported as unpaid after March when you paid it, then you don’t have an issue that I see.

You have went from unpaid charge off to a paid charge off. Or you could’ve went to a settled charge off. Which did you go to? Let me ask you a question, did it ever even have a charge off designation before this? Or did it only have a number designation?