Charge Off Question

Correct me if I'm wrong:

Charged-off mark stays in your credit record for 7 yrs w/e state you belong to. Your credit card issuers made the reporting in 2001 because you could not pay the amount for some reason. These charged-off marks will go off automatically in 2008 as you have mentioned. This is influenced by 7 year reporting act of FCRA; this has no connection with SOL.

SOL for the state of Michigan is 6 yrs. SOL starts from the date you paid last for the account. Once SOL for a specific account is expired, no legal action can be taken against you, however, collectors can still try to get it. One payment towards a past SOL debt restarts the clock.

Charged-off marks hurt credit score like anything. A paid charged-off is somehow better. See more discussion on charged-off accounts here:

http://forums.debtcc.com/forums/chargeoff-acc.html

In Michigan, the statute of limitation for legally collecting the debt is 6 years. This period starts from the date of last activity in your account. It appears that this account is within the SOL period. Although, it has been charged off, some collection agency will contact you for paying the amount. Though the negative information has entered your file for a period of seven years as per the FCRA laws, but still you can improve the file by giving a better view to it. Pay off this account and see this account posted as 'paid charged off.' There might be a very small increase in your credit scores with this status in comparison to what was previously. But if it's anything that matters here, its better.

Ok I think that's where I get confused.. So the SOL is just a protection against legal action?

If your debt account is within the 6 years timeframe as per the state laws of Michigan, the creditors or the CAs can take legal actions against you and get money from you.

If your debt is past the SOL period, i.e..it crosses the 6 years period, no CA or the OR can take any legal actions against you. They can't force you to pay the said debt. You can escape it legally.

EEK, That still sounds so wrong though! But thank you for the advice.

And speaking of which on the activity in his report I see CO from 2004-2005 but the account was closed 2001. But when I look at last activity it says 01-06-2006 so someone si updating something and we haven't done anythign to this account yet. So how would I find out what the actual date of last activity was?

Check the date you last defaulted on your payment in this account.

How would we do that?

hmm.. You now need to talk to your creditor and see if they can give you any details. Date of last payment made is shown in the CR as well.

Actually I have 3 different Cr's in front of me from different people and none of them say when the last payment was received. It looks like someone went in there and updated everything to this month! As in last activity says 1-6-06

Ok, but did you make any payment on 1-6-06 to this account?

I am assuming this might be an update from your agency. This has no relation with the date of last activity in your payment.

No. We haven't contacted this place at all. I know for a fact he hasn't made a payment to them since I've known him and that goes back to 2001. He didn't even know he had them until a couple weeks ago and we have been dealing with everything else.

That's why I'm saying something is not right here.

This gives you a fair chance to place a dispute with the Credit bureau. Highlight this item and request for some verification on this account. They will conduct an investigation and update your file. Most probably, if any information is missing or if it is incorrect, you will be sent a free copy of your file reflecting the change.

Yea I disputed this online and they sent us his credit report and that was only thing that was not changed. If I want details about this account do I have to contact the original grantor or debt collector?

The credit bureau must give you the results of their investigation done after you have placed a written dispute with them. Send your letter through certified mail with return receipt requested and keep your records in a file.

You can tailor this letter according to your needs.

Quote:

But he wasn't denied credit, Trans union just didn't give us any details about this account and just said the investiagtion came back and the account is verified.

I guess it's the same type of request but we won't be able to get his report for free becasue he wasn't denied.

I did receive a letter from the bureaus but they only said they were verified..they didn't give me any infomration what so ever about the account. And while all that info may be verified, why would it say date reported 1-2006, when we looked at it in december is said reported 12/2005. Also, they have papers in there that say the only thing we can do is write a statement on our report about this account, not get any inof about it. It's like every month they are changing the dates.. why would this be? can they do that? I thought they have to ahve to have the exact dates of when everything defaulted and they don't. And this is all updated on all 3 reports.

Kchriste, do you have any such document to prove that the credit bureau is showing the date incorrectly. Your last copy proving the date of the account has been modified will be helpful here. You can take some advice from a lawyer that specializes in FCRA violations.

are you guys saying that if i pay off a negative item that has been a charge off that it won't disappear after i finished paying it off? or after 7 years? and that my credit score will get a little better?

Once you have paid off a charged off account, it will be shown as 'paid charged off' in your credit report. Although it is a negative remark, but a paid status slightly brings some improvement towards your credit scoring.

After 7 years from the date of reporting, this account will be removed from your credit file permanently.

The date of status changes when you dispute an item and it remains unchanged. Assuming you disputed this account in December or early January, the act of disputing updates the status. Also, there is an issue with Experian and FICO that penalizes you for disputing an unpaid charge-off. Experian doesn't provide FICO with the date of initial delinquency, so FICO uses the most recent date of status to calculate your FICO score. The result is that your dispute makes the account look like a brand new charge-off to the FICO scoring model. Depending on circumstances, this can lower you score by a 100 or more points.

Wow, Adam..Where did you find this information? I'd like to read more about that!