What qualifies as a currently delinquent account? (Equifax)

[GaryB_5165]

Hello,

My son would like to utilize an Upstart loan to pay off some debt and complete some work on his car to get it running again. At this point his Vantage 3.0 scores from all three bureaus meet the lenders requirements.  (Upstart site says 600 minimum for either FICO or Vantage 3.0, he's at 640 (TU & EX), 732 (EQ) for Vantage 3.0).  He meets all the other requirements as well, but we are curious about one:  "You must also not have on your report any accounts that are currently delinquent."      He does have a credit card account that has been closed since 2018 that was charged off (balance due of $190) with Bank of America.  It is reported each month as Charge-Off by Bank of America, the OC.  Is this considered a "currently" deliquent account, or does that phrase only apply to open accounts? 

Thanks

[blindambition]

It could potentially be considered recent. Each lender is different, but many consider 24 months at the minimum. Having it update monthly doesn't help. Good luck on your decision!

[GaryB_5165]

Thanks @blindambition .  His last payment was in October 2018, so maybe we will wait to give it a go until after next month and try it.  We will also keep monitoring his scores/reports and see if anything changes next month.  

[blindambition]

Just a heads up! Paying that CO off will stop the monthly updates. It will update one last time to report paid or settled.

[Anonymous]

Interesting that a lender allows either Fico or VS in their consideration of terms.  That's the first time I've heard of that.

[GaryB_5165]

Yes @Anonymous, it states on their website: "Borrowers on Upstart must have a minimum FICO or Vantage score of 620 as reported by a consumer reporting agency. Note, we do accept applicants with insufficient credit history to produce a FICO score." 

[Anonymous]

Is it currently unpaid? Then it would be currently delinquent.

The delinquency period will end when it is paid. Two years after that, it will no longer be considered recent by most

[RobertEG]

A closed credit card means that it is no longer available to make new charges.  It does not effect the continued debt oblgation, or change the current status of delinquency.

The creditor can continue to make updating monthly reporting on a closed account, and if the account is delinquent, to report the currrent status as delinquent.

CRA reporting guidelines permit the reporting of currrent or prior monthly delinquency status as either days since initial delinquency (e.g., 90-late, 120-late. etc) OR simply as CO, which is an acceptable reporting after they take a charge-off as the current delinquency status.

Yes, a closed credit card that remainds delinquent continues to have a current delinquency status until the delinquent balance is paid or otherwise discharged.