Charge-Offs

How to Dispute a Charge-off on Credit Reports

disputing-credit-information

A charge-off on a credit report is detrimental to credit scores, especially if it is recent. But how accurate is the information being reported about that charge-off?

What is a Credit Charge-Off

Banks, lenders and credit card companies will write off an account balance after a certain amount of time of nonpayment. That account balance is now a bad debt and referred to as a “charge-off.”

The time-frame of an account balance going to a bad debt is usually 180 days of non-payment. The creditor can no longer keep the debt on their books as an asset and therefore write it off as a bad debt.

But this does not mean you no longer owe the debt. The account may be transferred or sold to a collection agency and a negative credit mark will be entered on your credit reports by the creditor and the collection agency. Charge-offs are difficult to remove but there are ways to dispute a charge-off which may result in it being removed from your credit report. You can request a creditor to substantiate each and every fact they are reporting about the charge-off. Demand that they prove a particular fact about the listing or delete it.

Unpaid charge-offs can also lead to a legal action. The original creditor or collection agency can pursue legal action as long as the debt is within the statute of limitations. After the statute of limitations has run, a debtor can no longer be sued and the debt basically becomes uncollectible.

“The best way to handle a charge-off is with a legitimate dispute of an error in reporting.”

Base charge-off disputes on a factual inaccuracy

Account Balance. Has the account been transferred or sold to a collection agency? If so, the account balance should be at zero. Many times the account balance will report on the charge-off account as well as the collection agency account. This can hurt your credit-utilization, making it look like you owe both the creditor that sold the account and the collection agency. An original creditor who has sold or transferred the account to a collection agency cannot continue to report a balance owed. If they report monthly it must report as a zero balance. If there is an amount owed once the account has been sold to a collection agency, then this is a factual error that can be disputed because it is inaccurate or incorrect credit reporting.

Dispute the balance and ask for a deletion. Sample Letter: I am writing to dispute [name of account and account number] on credit report number [xxxxxx]. The balance listed on the account is incorrect. Please delete the account.

The letter does not have to be long. Make no mention of the fact the account has been transferred or sold to a collection agency and that the balance should be zero. In other words, do not help the credit reporting agencies “correct” information.

Always ask for a deletion of the entire account because corrected negative information does not help improve your credit score. But keep in mind the credit bureaus are not required to delete incorrect information; they can simply correct the information to reflect accurate reporting.

Open Date of Account. Is the opening date of the account correct? If not, dispute the date. It may be a minor issue; nevertheless, it is a factual error you can base a dispute upon. A simple letter stating the opening date is incorrect. Request a deletion of the entire listing. Do not give them the correct opening date as it is their responsibility to investigate, not yours.

Highest Balance. This category on a credit report can often be incorrect. Dispute the “highest balance” you never know, you may get the entire listing deleted if the original creditor cannot provide the correct high balance especially if the account is older and they no longer have the records.

Late Payments. Are there late payments after the account has been charged-off? If so, how can that be? There should be no delinquencies after the “closed” date. Additionally, does the credit report show an amount charged off along with a past due amount? If so, this is incorrect reporting if the charge-off account has been sold or transferred to a debt collector. Request a deletion. It may only be corrected to reflect a past due amount of $0 but at least try to get a deletion because accurate negative information is still negative on your credit reports.

Dispute account status. Charge-off accounts that have been sold should not be listed as currently open by the original creditor. Request a deletion of the account even though it may only be corrected, as stated above, it does not hurt to request deletions.

Dispute Re-Aged Accounts. Creditors and collection agencies that re-age accounts are seriously affecting your credit score. It is imperative that you dispute re-aging of accounts. Re-aging causes a negative account to appear more recent. The more recent the charge-off appears to be, the more detrimental to your credit scores. Re-aging also causes an item to stay on your credit report longer which is not only illegal but also a credit score killer!

There is an exception to disputing charge-offs. Let’s say the charge-off account has been paid and two years have passed. It may be wise to just leave it be. Removing it may lower your credit score because of the date of last activity. You want to avoid the date of last activity on the account appearing as current. Remember some older negative entries matter less when calculating credit scores. Once a charge-off gets 48 months or older, it has much less impact on your credit scores. Unless you are purchasing a home and the mortgage lender requires you to pay the debt; or, in the cross-hairs of being sued for unpaid debt, leaving it alone may be the best strategy.

Exercise Caution when disputing an older Charge-off

When disputing a charge-off you run the risk of lowering your credit score if the dispute returns verified as accurate. This can hurt your credit score because the credit bureaus will update the last date of activity on the account. Once the date of last activity is updated the negative account appears recent. Often times older charge-offs are not updated monthly by the original creditor which is good for your credit score.

Recent activity, whether that activity is a payment, a missed payment or monthly reporting by an original creditor, all counts as recent activity. Updating a negative charged-off account does nothing but causes the negative account to look more recent. Recent negative information on your credit reports is more detrimental then older negative information. Just consider all possibilities when disputing a charge-off — it may be better to let it age off.

Settle the Charge-Off

At some point the creditor may be willing to settle the charge-off and even accept less than what is owed. Settlement can be a good option if you just want to move on. It gives you a chance to stop the calls, letters and most importantly stop the threat of legal action. You can better concentrate on rebuilding your good credit. The only issue with settlement is that the account remains on your credit report. You should ask the creditor if they can delete the account once it is settled.

Payment in exchange for deletion is common with collection accounts but may be more difficult to negotiate with creditors. But it’s worth a try. The reason it’s more difficult is that the credit bureaus encourage creditors to preserve accurate consumer credit histories for use by others and not to delete accurate negative information.

But you can always request any creditor to voluntarily delete a negative account. That’s because the creditor is not required to provide a reason to the credit bureaus as to why they deleted information they previously reported…the creditor can just request a deletion PERIOD.

If the creditor will not agree to a deletion then request the account be simply noted as “Paid.” Some creditors will mark the account “Paid/Settled” and this can add to your troubles. When you settle an account it indicates that the creditor agreed to accept less than the amount owed on the account. A settled account indicates a higher level of risk because it means the account went past due.

Charge-offs are not forever

The good news about charge-offs is that they do not last forever. After 7.5 years from the date the account first became 30 days late on the original account it will be removed from your credit reports. In some instances it may be best to leave a charge-off alone because the longer the account has been charged off and has had no activity, the less it impacts your score. Anything that is less than 12 months has the most impact on your credit score and the impact reduces after that, unless you keep adding new collections and charge offs to your credit reports.

As you can see there are several options in disputing a charge-off. Consider allowing a professional repair your credit. Lexington Law assisted clients in removing over 7,000,000 negative items from combined clients credit reports last year. Those negative credit items included: Bankruptcies, Foreclosures, Tax Liens, Repossessions, Judgments, Collections, Late Revolving Credit Payments, and Inquiries.

51 Comments

51 Comments

  1. Bennie

    May 4, 2017 at 9:41 pm

    I have 3 credit cards that were reported as charge offs on my credit report in 2012. I recently called the creditors and each one stated that they’re no longer trying to collect the debt and they’ve submitted 1099-Cs to the IRS.
    Each charge off is still showing a balance on my credit reports, which are making my credit utilization score high.
    Can I dispute the balance of these charge off since 1099-Cs were submitted for them? Its seems to me that they should be reported as a zero balance on my credit report because the IRS is considering this to be income that I have to pay taxes on.

    • Lisa Phillips

      June 15, 2017 at 5:01 pm

      You are correct in your thinking. The very nature of a 1099-C is that it’s a cancellation of debt according to the IRS. Whether the debt is cancelled, discharged or forgiven, the lender has forgiven the debt, therefore the balance should be $0.

      I can only suggest that you dispute the debt with the credit bureaus and request they ZERO out the balances. A zero balance should help raise your credit scores. Supporting documentation such as a copy of the 1099-C form might be helpful to submit with the dispute. If the lender verifies the accuracy of the reported amounts, make a complaint directly with the Consumer Financial Protection Bureau.

      And, you should consult a tax professional if you have not paid the tax on the forgiven debt amount. A good tax professional should be able to assess whether you owe taxes on the forgiven debt because a 1099-C does not necessarily impose a tax obligation on you.

  2. Maruthi

    May 4, 2017 at 12:23 pm

    Hello Lisa. I am living in an apartment managed by an agency. I have been living in same community under this agency since June 2011.
    I moved from one apartment to another apartment in same community in Nov 2014 and paid off all rents and utility charges. I continued living in the new apartment till date.
    Suddenly, I have seen a drop in credit score 2 months ago. When I saw my credit report few days ago, I noticed a debt collection entry by a collection agency.
    I went to my apartment agency and asked what are those charges as they were never communicated to me in first place (They did communicate through e-mail for my past moves within community).
    Now they printed an account statement upon request and told that I owe them moveout charges at the end of nov 2014. They are not reday to take money from me to clear my debt and recall debt collection. And they are asking me to pay to collection agency.
    They have no records of communication as they deleted their mails and even saying that their email might have been sent to my junk e-mails folder.
    Please advice me on how to proceed in this case as I never got any information on this debt and I believe they put the moveout charges at their discretion. There is no moveout checklist shared.

    • Lisa Phillips

      June 14, 2017 at 1:41 pm

      Start by researching your rights as a tenant.

      Requirements from Tenant/Landlord. There should be a regulatory agency in your state that oversees Landlord/Tenant Relations. Call that agency or make a complaint about your concerns to see if they can intervene on your behalf. Also, your rental agreement should contain procedures for moving out and what financial responsibilities and notifications are required by you and the landlord. You can find tenant’s rights here. Landlords are required to keep detailed records of all repairs, cleaning costs and any other move-out charges. You may have some type of leverage with them if you find the right state agency to make a complaint. I’m not sure they followed proper procedure in notifying you by email, then stating they “deleted” the emails.

      Keep a Paper Trail. Document everything as thoroughly as possible. Keep records of all correspondence and calls. If the landlord did not properly notify you of move-out charges you may have a case for deletion from your credit reports. Since they communicated with through email, they have no proof (i.e. US certified mail) that they properly informed you of any move-out charges. you may be able to get them to drop their charges and get your credit report cleared.

      Requirements from the collection agency. When a debt is sent to collections, the collection agency must send you a letter stating:

      • the amount of the debt
      • the name of the original creditor (your former landlord)
      • that you have 30 days to dispute the debt in writing and ask for proof or verification of the debt

      If you do not agree with the charges, it is important that you dispute the debt and send a debt validation letter. When you dispute a debt in writing and ask for proof of that debt, the collection agency must stop all collection efforts until they have provided you proof.

      If you never received a letter from the collection agency, that’s a problem too. However, that is a debt collection practices matter under the Fair Debt Collection Practices Act and not necessarily related to credit reporting. You can make a complaint with the Consumer Financial Protection Bureau regarding the collection agency not contacting you about the debt but instead putting a negative mark on your credit reports. Request deletion from your credit reports as a resolution.

      If the debt is valid though, you may want to request a payment in exchange for deletion from your credit report. You can read more about pay for delete agreements here.

      Seek Legal Advice. Once you research your rights and write the management agency and/or debt collector, you may have to seek legal advice if you do not get the desired resolution. There are attorneys who specialize in tenant rights.

  3. Adam

    April 13, 2017 at 8:16 pm

    Lisa – thanks for your great post! I’m in a bit of an odd situation, and I’m hoping you can help. And I apologize in advance for a very long post coming, but I’m at a complete loss for what to do next and I do not have the money to contact a lawyer.

    In August 2016, I had a cable/Internet/phone provider that I was changing to another provider. A VERY long story short, but I canceled only my phone with the old company, leaving only my cable and Internet with the old company. The old company informed me that because I dropped the phone and my account was tied to my phone, they had to open a new account for me. I said OK. I kept that “new” account for two weeks. After two weeks, I called to cancel the remaining two services. They said okay and that I would receive a final bill for the “new” account in a few weeks (i.e., a bill for Internet and Cable for two weeks).

    After a few weeks (Mid-September), I started to receive bills from the old company for my new account with an astronomical total. I called immediately to inquire why the amount was so high (I was expecting it to be $75 [which was about two weeks of charges], and instead it was $350). The new bill included a full months’ worth of charges and installation fees as well, even though I only had the services for two weeks and had no installation. I was informed that it was just “an error in our system because the system had me as a new customer” and that I would receive a correct final bill soon.

    The next month (October), I received the same bill again. I again called and had the same conversation – I was told I would receive a correct final bill soon.

    The next month (November), I received the same bill again. Rinse, repeat with customer service.

    In December, the letters changed. The language was stronger and threatened a referral to a collections agency if I did not pay. I again called, asked to talk to a supervisor, and finally got an explanation that because a final bill was never created “for some reason,” they would have to manually adjust my account down the price it was supposed to be. They said they put the request in the system, and that I would receive an updated bill with the correct amount soon.

    In January, 2017 I receive the same stronger worded letter again, still noting the high balance. I again call, and again go through the same exact process. I am informed that the previous adjustment was denied “for some reason,” and that they would put it in the system again.

    Later in January, I called back to confirm the amount was lowered, but was informed it was still “pending” in the system.

    In February, I received a “collections” notice from the companies’ “in house collections team.” This time, it had a different number to call, which I did.

    I was informed by this team (in February) that all the previous adjustments were denied, but that they would work with customer service to get the erroneous charges removed. I said I was concerned about it being referred to a credit agency and collections, and they said it shouldn’t do that because I have been calling to challenge the charges from months. They said I should expect a call back within 2-3 weeks. No call came.

    Finally, in March 2017, I call again and ask to speak to a supervisor. I am informed during this call (for the first time) that they actually CHARGED OFF my account back in November 2016. I ask to speak to their supervisor, who talks to me for a few minutes, says “We don’t often remove charges from a credit report, but I will look into this and call you back.” No call back.

    The next day, I check my credit report, notice the charge off back in November, and notice my score dropped about 120 points (from 810 to 690).

    The next week, I call back that supervisor directly, asking for an update. She informs me that they removed the installation charges, but that the full months’ charge will stay because they have a 30-day minimum for new accounts (even though I wasn’t really a new customer). She also informed me that “our team will not approve removing this from the credit report.” She informed me that they will update the amount of the charge off, but that’s “all we can do.”

    I asked for a call back from that person’s supervisor, but to date have not received another call (it has been two weeks).

    In that time, I have challenged the charge on my credit report through Experian (but not the other two yet) and have placed an “informal complaint” with the FCC. I have no formal written communication from the company other than the monthly bills and “collections” notice, and I never formally wrote the company a letter challenging the charges (only challenged via phone calls).

    I checked my credit report again yesterday, and noticed the amount of the charge off dropped to remove the installation charges.

    My question to you is, what else can I do?

    Thank you SO very much for any help you can provide.

    • Lisa Phillips

      April 18, 2017 at 5:19 pm

      Start creating a paper trail. You have great notes, including dates and details, but now you need a paper trail. A dispute directly with the credit bureaus is an option because you have an actual inaccuracy. The dispute should be in writing (certified, return receipt) because you are building a paper trail plus you want to request a deletion of the charge-off not a correction. If the charge-off is removed with the dispute, then your work is done. However, a dispute may simply result in an update (correction) of the charge-off amount.

      The second option is to write a letter to an executive at the cable company explaining what occurred and how you would like this issue resolved (removal of charge-off from credit report). It might help to offer payment in full for the remainder of the bill as part of your request for deletion. Send the letter certified, return receipt and give it about 2-3 weeks for a response.

      The letter should be in the tone of a goodwill letter in that you are making a request, not a demand. Points in your letter should be along this line:

      • It was a misunderstanding
      • You repeatedly attempted to resolve the issue
      • The company failed to respond on multiple occasions
      • Your credit score suffered due to this mistake
      • You really need this charge-off account removed from your otherwise pristine credit history.

      The response determines your next steps. If it’s favorable, your work is done. If not, since you’ve now created a paper trail, it’s time to get the Consumer Financial Protection Bureau, your State’s Attorney General and the Better Business Bureau involved. The BBB often gets disputes resolved better than the CFPB. With all complaints, your resolution is complete DELETION of the charge-off.

      If you have to resort to writing a “goodwill” type of letter, make sure you research the company’s officials, namely a VP or CEO. An official has complete discretion to grant exceptions to a company’s policies of not removing charge-off accounts.

      The best of luck to you and please keep me updated.

  4. CRBlake

    March 9, 2017 at 11:19 am

    Okay Lisa if you can help me I would greatly appreciate it. I had a vehicle repossessed, now it says states that it was charge off bad debt. It says open date is 4/2006, reporting date is 12/2011. Now this was brought by another company they are now trying to collect the debt, they opened it in 3/15 last reported in 2/17. My question to you, I am trying to purchase a home what route should I go? Should I dispute the charge off, or call the original company to make payments? Or pay the company that brought the debt?

    • Lisa Phillips

      March 22, 2017 at 5:30 pm

      Your strategy really depends on consultation with your mortgage lender. A mortgage lender can best advise you but, if you are trying to clean your credit before you apply, here are several things you may want to consider.

      (1) Do you know the date of first delinquency of the car repossession? In other words, was the year you stopped paying the car not and a charge-off ensued was in 2006 or 2011. If it was 2006 then the charge-off should no longer be reporting on your credit reports because of the 7.5 year credit reporting time limit. If, 2011 is when the charge-off occurred then the account should be removed in or about 2018. You may want to order your credit reports from each of the credit bureaus to determine when the charge-off is due to be removed.

      (2) Disputing the charge-off could result in a deletion if the creditor does not respond in 30 days; or, it could be verified as accurate and that could be a problem. When a charge-off dispute is verified as accurate the date of last activity is updated which causes the charge-off to look more recent. It doesn’t cause the charge-off to remain on your credit reports longer than the 7.5 year reporting period but it can cause a decrease in credit scores because the charge-off looks more recent to the FICO scoring system.

      (3) It would more than likely be fruitless to contact the original creditor because it sounds as though the debt was sold, not transferred to a debt collector. If you must pay the debt collector, I would suggest negotiating a settlement along with a deletion of the debt collector’s account. This would be your best bet if you choose to make payment. The older a debt gets, the less it is worth. However, do not inform the debt collector you are seeking a mortgage because they may not be willing to negotiate a lower settlement. You can get more information about a pay for delete agreement here.

  5. Diane Crowner

    February 28, 2017 at 1:43 am

    Hi Lisa,

    I have a hospital bill for $850 that I incurred in 2012. It was turned over to collection within 6 months or less, and I have never paid anything on the bill. On 2/15/17, I read about disputing, writing to all three credit reporting agencies with “dispute reason: Contract was canceled. Dispute comments: No contract.” I did this, and now notice on my credit report that it was moved from open accounts to closed accounts, and it says “collection/chargeoff derogatory.” It shows I still owe $850, and that amount is added to the total debt of all my open and closed accounts on the credit report. Here in Michigan, there is a 6-year statute of limitations on this bill, so it is still in current status. My question is, can the collection agency sue me, when they are the ones who owned this debt at the time of the chargeoff? (I’m asking because all advice online says after a chargeoff, the debt MAY still be turned over to a collection agency, who could then pursue it. That’s not the case with me–it was already with a collection agency.) So, I am wondering if the collection agency allowed the chargeoff, and essentially is giving up on pursuing it?

    • Diane Crowner

      March 9, 2017 at 3:13 pm

      Also, Lisa I am wondering, if I do have to pay it, if I should contact the credit reporting agencies and have it moved from “closed” accounts to “open” accounts again. Thanks!

    • Lisa Phillips

      March 22, 2017 at 5:01 pm

      The first thing to be aware of is that you can be sued for an unpaid debt as long as the statute of limitations has not passed. It sounds like the original creditor sold the debt to a debt collector. If this is the case, the debt collector can resale the debt to a different debt collector. It’s not uncommon when a debt collector fails at collection efforts, they will sell the debt to another debt collector.

      A collection account must be updated to reflect “closed” on your credit reports if the debt collector’s authority to collect has been terminated by the original creditor; or, if the debt collector sells the debt to another debt collector.

      If this is the case, the debt collector is supposed to delete the account from your credit reports in order to avoid multiple debt collectors reporting simultaneously on your credit reports for the same debt. Normally, a collection remains open until it is either paid or the collection authority of the debt collector is terminated.

      If you have a closed collection on an unpaid debt, you can seek deletion. But you have to be aware that the collection agency may not have closed the account. It may be a mistake. If so, the collection agency can reopen the account which may cause your credit scores to lose points because it looks as though the collection account is more recent.

      Contacting the credit bureaus to request a closed collection account be reopened is a mistake.
      Before you do anything, you might want to give the debt collector a call and inquire as to whether or not the debt collector still has an active assignment or ownership of the debt. If not, they should delete their credit reporting per the policy of the credit bureaus.
       

  6. Ron

    February 27, 2017 at 6:50 pm

    Hello, Lisa

    I was considering disputing a few minor problems with the way some accounts are reported, but did my due diligence and read up on the subject first, hence, I am here.

    Back in late 2013 I ran into financial trouble and was unable to keep up with my CC payments. The late fees were higher than the minimum payment which made it even worse, so I effectively gave up and let them go to ‘charge-off’ then ‘collections’ now back to only the original creditor as a ‘charge-off / sold to another lender’.

    I periodically check my reports via online free report companies like Credit Karma for transunion & equifax, and yearly from annualcreditreport, (but it only allowed transunion). So I went directly to experian for their free report online.

    That is when I noticed that they had “Status Updated” & “Balance Updated” dates in 2015 on all three reports. But my experian report shows the monthly payment blocks and those dates now have a little green “OK” online and with CLS under that month in the printed report, after about 18 months of missed payments & CO or FP. Even went through collections, but they gave up on me.

    Tried to look up what CLS means and only found [CLS 47 Credit line secured — revolving terms], on the experian site, and nothing else anywhere. What does ‘Credit line secured — revolving terms’ mean and why did they put a green “OK” on that month?

    Sorry for the long drawn out question, but this may have a big impact in how I handle my credit report and dispute or not.

    Thank you, Ron

    • Ron

      March 2, 2017 at 10:39 am

      Edit to above post.

      Lisa, sorry to double up on this question, but it is important to me. More to the point, this may be a paperwork snafu. On the Experian CRA site anyway, they have me as a ‘green OK’ which to me shows paid with a zero balance.

      Can I use that to my benefit? Dispute it as paid. Concern comes about if I dispute it, the clock starts over.

      I really do not want to screw people out of their money, I offered to pay what I owed when it went past due, but they refused asking for both past due & over limit fees. The first of which was .12 cents because the interest took it over the limit. 12 cents cost me $35 over limit fees.

      The question is, can I use their own paperwork and use it to my benefit?

      • Lisa Phillips

        March 8, 2017 at 11:55 pm

        You have to keep in mind that the credit bureaus’ client is the creditor, not the consumer. It may be their paperwork but if the credit bureau or original creditor “corrects” their paperwork, they could simply update the status and resubmit the accurate negative information back into your credit file. Now, of course, that’s a risk you have to decide whether or not to take.

        But I just don’t think you have a “gotcha” moment and here is why: Experian has the history of the account from when the creditor first reported the account – from the inception to the charge-off to the current status. Incorrect reporting does not always result in a deletion, it could simply result in corrected reporting. What is likely to occur is that the dispute will result in an investigation with the original creditor being contacted by the credit bureau. Even with your support documentation, the original creditor can update the account to reflect the negative history.

        As far as the charge-off itself, no matter how many times the creditor updates the status, the date the account is due to be removed from your credit reports will not change. Disputing it won’t change the date of first delinquency which is used to determine the 7.5 year reporting time-frame for charge-off accounts; so you don’t have to worry about the account remaining on your credit reports longer than the law allows.

    • Lisa Phillips

      March 8, 2017 at 7:21 pm

      Reporting codes are used to maintain both prior and current account status. The current status of an account is what counts most in regards to credit scores. If the current status reflects OK under payment history it doesn’t mean that the account is no longer a charge-off, but that for some reason the creditor updated the status. As far as the account type code, CLS 47 Credit line secured – revolving terms; I don’t think there’s anything special about it. It’s just what it states — A code used for Experian credit bureau reporting which specifies the account type. Perhaps it may be an incorrect account code attributed to the charge-off but as long as it’s not hurting your credit scores, you may want to leave-it-be.

      • Ron

        March 9, 2017 at 4:14 pm

        Thank you Lisa,

        You just proved that us old farts can still learn a thing or two. You said exactly what I thought, but you made me feel better.

        Again, I am sorry I left those creditors out in the cold, but for some reason my credit score has improved, from time alone.

        In the mean time, I applied for a Discover – secured card – hard inquiry, just to take a chance and for some reason they approved me for $1800 [ unsecured ], with a 642 FICO. I will not mess up again.

        I guess reading and now talking to people in the know really works.

        I want to thank you for your knowledge and your time to help people like me, Thank You – Ron

        • Lisa Phillips

          March 20, 2017 at 6:01 pm

          You are very welcome Ron. Credit scoring is a game, learn the rules and you’ll always win! And, time does wonders for a credit score, even if there are negative items in your history. Congrats on the Discover unsecured card. Clearly you are doing the rights things and well on your way in the rebuilding process.

  7. Crista

    February 15, 2017 at 9:17 am

    I am in the process of trying to rebuild my credit. I have a credit card in collections on my credit reports. The last payment made was 7/20/2015. It was listed as charged off as of 4/2016. The debt was sold to a collections agency and they reported an over the limit balance to Transunion making this old debt appear new and hurting my utilization rate.. The card was through Capital One. I disputed the information on my credit report because it was a charge off and showed a balance and I recently received a settlement letter from a collections agency for this account. The direct dispute results came back and it stated account was verified. This in turn makes this account look current. The information Capital One is providing is inaccurate and now they are reporting I am over my limit for this card every 4 days since January 2017. to the credit agencies. Can they do that and what can I do to rectify this situation? I was planning on trying to negotiate a pay for delete once I receive my tax refund but there are differences in the information they are reporting between Experian and Transunion. I feel they are trying to bully me for a payment but reporting over the limit every four days. It is killing all the progress I have made rebuilding my credit.

    • Lisa Phillips

      March 20, 2017 at 4:50 pm

      If Capital One is reporting a balance then they still own the debt. Capital One is undoubtedly doing just what you think…trying to make you pay. The tactics they use in reporting are within the Fair Credit Reporting Act even though they are unconventional. Updating and reporting your balance greatly harms your credit scores because of the negative impact on your utilization, and, causing the negative account to appear to more recent.

      I really can’t explain the different reporting from credit bureau to credit bureau; however, the FCRA only requires that information reported be accurate. Creditors can choose to report negative information one way at Experian and another way at Transunion, or not report to one credit bureau at all.

      Most creditors that charge-off accounts sell the debt, report a zero balance and cease updating to the credit bureaus. This allows the negative account to age which eventually leads to it having less and less impact on your credit scores.

      Because Capital One updates unpaid debt on a consistent basis your only option may be to pay it regardless of whether they agree to a pay for delete agreement. While a pay for delete would be great for your scores, simply paying the debt can also help in the long run and here is why: Once the debt is paid your scores will benefit from Capital One not consistently updating the account with the credit bureaus. The account will then begin to age. The older a negative account gets on your credit reports, the less impact it has on your credit scores.

      Because credit cards are considered revolving accounts, payment will also reduce your overall credit utilization. The account will no longer be included in utilization which may give you a bump in your scores.

      And, the Capital One may very well delete the account once it’s paid. Of course it’s better if you can negotiate a pay for delete prior to payment but even after you make the payment, you can send goodwill letters to Capital One’s Executive Offices requesting deletion. It may take more than one goodwill letter, but don’t give up.

  8. Candace

    February 2, 2017 at 7:02 pm

    Hello Lisa,

    I am trying to fix my credit report and feel kind of confused as to which choice to make. I was told by one person to dispute the 2 charge offs I have. Then I was told by another person to send a “settle to delete” letter for the charge offs.

    I am trying to purchase a home. I am a first time buyer and I truly want to better my life for my daughter and I. On my credit report, I have one charge off from a few years ago(account opened 2013 & updated 2016). I was involved in a car accident (car was totaled) and the insurance company I had only paid for what the car was worth. Leaving the remaining balance up to me. They also received the warranty payment I had on the car as well. The finance company received the car. I was left with no car and no money. I feel like I was ripped off. When I purchased the car, I asked about GAP insurance but the dealer told me that I didn’t need that since I was going to have full coverage for my car insurance. I had to start over and now a $4,500 balance is left on my credit report as a charge off which I am still left to pay.

    I also have an old credit card balance on my account that was opened in 2008. Its saying on my report that it was last updated in 2013 but the card was closed out from the company way before this.

    I just want to know the best way to handle these 2 charge offs so that I can fix my credit score and report. Any suggestions will be greatly appreciated!

    Thank you so much for your time!

    • Lisa Phillips

      February 17, 2017 at 10:25 am

      It definitely sounds like you got the short end of the stick with the car situation. It may be a waste of time trying to undo that situation. As far as the 2008 account is concerned I would not touch that in terms of disputing or settling. It seems old enough that it should be coming off your credit reports soon. If it has been 7.5 years since the account was charged-off request the credit bureaus to remove the charge-off. Negative items cannot be reported past this period, but oversights can occur.

      In reference to the car debt, you may want to pay the charged-off amount, in full, and here is why. Mortgage lenders look more kindly upon a charge-off paid in full as opposed to one that has been settled for less or not paid at all. But, before you offer to pay the charge-off in full speak to someone in management to see if they will agree to delete the charge-off from your credit reports. Explain to them that you are trying to obtain a mortgage, you are willing to pay but a full deletion would help you get a better interest rate. Make sure you get in writing any agreement you are able to negotiate.

      If you choose to dispute the charge-off and it comes back verified by the creditor, the date of last activity will update to a current date and this can harm your credit score. Even if a dispute results in a deletion, that deletion may be temporary if the creditor regularly reports to the credit bureaus. In other words, it can be reinserted.

      Make sure your current credit lines are paid on time and you are carrying little debt. Mortgage lenders like to see a positive payment history of 2 years on your current credit accounts along with low balances.

      The best of luck to you in buying your first home.

  9. Ella

    September 8, 2016 at 8:23 pm

    Hi Lisa! I’ve been reading your blog whilst trying to get my life together! I’m hoping you can help me personally! Here’s my situation. I have 2 accounts in collections…one medical..one from Comcast cable.

    I found that these accounts were in collections when I signed up for credit karma. Anyway, I could make the payments in full but when I called the collection agency they both advised that they had a ‘zero deletion policy’. I was going to pay them both and have it marked as ‘paid in full’ but I read that it will actually hurt my score! They said a goodwill letter was also pointless (my own wording). The original Comcast account is from 2013 but it says it’s been open at collections since December 2015 (Comcast didnt report). Collections asked me for documents to support a dispute but I do not have any from 2013! I’m not sure if I should pay it and dispute it with the credit bureaus. I am in the process of trying to buy a car because I need a safe vehicle for my babies.

    The other account is only for $69 and while I could pay it, they will not do a pay for deletion. I’m thinking about hiring CreditSaints and cut my budget elsewhere. Please help me!

    • Ella

      September 10, 2016 at 11:44 pm

      Update: The medical bill has been paid and they are going to delete it!!!!! Still debating on how to deal with Comcast! Help!!

      • Lisa Phillips

        September 12, 2016 at 6:07 pm

        Congrats! That’s great news. Keep in mind my earlier reply that lenders using FICO 8 scoring model ignore collection accounts under $100.

        • Ella

          September 13, 2016 at 12:25 am

          Hi again! Thank you for replying, I appreciate it! was going to reply via Facebook but I was scared! Just a follow up…the Comcast charge is $220..Ive recently been denied for a car loan due to a recent collection on my account. I currently have a 657 FICO score down from a 697. I asked comcast (credit management LP) to verify the debt but they told me I needed to send in all of my Comcast documents..last bill, receipt, etc. in order to dispute it. I think I have to pay them and start my dispute with the credit bureaus because I’m getting nowhere with the collection agency. Now here’s a silly question but do I send goodwill letters to comcast, the collection agency, or the credit bureaus? The date Credit Management LP first reported this was November 2015.

          • Lisa Phillips

            September 20, 2016 at 5:48 pm

            You would offer a pay for delete agreement to the company that is reporting the negative account. And, the goodwill letter should be sent to the company that is reporting the negative account. This might take some effort. It can be worth researching an executive’s name to send your offer directly to them. Even if the answer is no, send again until you get the desired results.

            It helps if you let them know in the letter you are trying to purchase a vehicle and that a goodwill deletion of the paid account would help you in that effort. Unfortunately there are no rules or laws that require a deletion if the information being reported is accurate. But a deletion can be done.

            Because debt collectors have a policy in their agreements with the credit bureaus not to delete a collection account based on payment of the debt, some don’t budge on the front line. It just requires the authority of someone higher up in their management chain. A company executive or CEO can always allow an exception to that policy and delete an account.

    • Lisa Phillips

      September 12, 2016 at 5:59 pm

      This may sound counterproductive to your efforts to improve your score; but, I think some collection accounts should be left alone. I say this because paying a collection account will undoubtedly update the “date of last activity.” The “activity” being the payment. Most lenders use FICO 8 scoring model where “paid” and “unpaid” collection accounts hold the same negative weight when it comes to calculating your score for accounts that exceed $100.

      But a new ding to your score may occur when the collection agencies update the “date of last activity.” It can end up looking like a new collection account and you don’t want that.

      Additionally, the collection account that is reporting an amount under $100 is not being calculated into your FICO score. I wouldn’t waste too much time or effort trying to get a paid for delete with Comcast. Their collection agencies do not like to cooperate because they know they are under no legal requirement to delete legitimate debts. Even though other collection agencies may do it, in the end, it’s a courtesy, not a requirement.

      If you really just want the debts removed from your credit reports, you can try paying them. Then dispute with the credit bureaus or try a goodwill letter type of letter. I would say persistence in a goodwill removal is about your best bet but that would mean you would have to pay them first.

      For purposes of purchasing a vehicle, most lenders are not going to require that the collection accounts be paid. Plus, you may still get a decent interest rate depending on the shape of your other accounts. If you have a positive credit history with a few dings, having a few older unpaid collections should be okay.

  10. Jaylin

    December 20, 2015 at 12:56 pm

    I recently disputed a charge-off from honda finance with Transunion. The amount under dispute was 10,999. The results of the dispute were the actual amount owed is 8,999. Unfortunately, I did not know disputing this would affect my credit score. My score had risen from 650 to 760 over the past 8 months from a conscious effort to pay off debt and keep all accounts current, this was the only thing on my credit holding me back. This dispute dropped the score 40 points to 720 which is so frustrating especially since I am preparing to refinance my current home loan. Can you recommend what I should do at this point? Should I dispute the account further? Should I push back on Transunion for dropping my score since the investigation proves the information reported was inaccurate? Should I try to negotiate a pay-off?

    • Lisa Phillips

      December 28, 2015 at 5:20 pm

      When an account is disputed it is suppressed from being included in the FICO score calculation even though it still shows on your credit reports. Once the dispute is resolved, TU may continue to report something like “account in dispute” notation.

      I cannot say for sure but having that dispute notation removed may help recover your credit score. I definitely would not initiate another dispute process. But I would call Transunion’s Special Handling Dept. at 800.916.8800 to request any “dispute” notations be removed as the account is no longer in dispute.

      Also, once a dispute gets older after a few months, your score should recover. That’s because once a dispute is resolved the date of last activity is updated and unfortunately this makes negative information look more recent. Again, it usually takes a few months for your score to recover.

      On another topic, if you are refinancing the mortgage company may require any “dispute” notations be removed anyway. You may as well start the process now (that is if any dispute notations are reflected), instead of waiting until you are in the process of refinancing.

  11. Stuart Boben

    November 5, 2015 at 9:28 am

    We have been fighting with Key Bank Collections on a student loan for almost four years now and every month we have paid them they have written a charge off on my wife’s credit report. Is there anything we can do about this because we have adamantly paid them and agreed amount every month.

    • Lisa Phillips

      November 9, 2015 at 7:51 pm

      Unfortunately there is no legal requirement for creditors to cease updating charge-offs monthly. It is an awful practice that some creditors choose to do but it is legal and they are within the rules of the Fair Credit Reporting Act.

      The only requirement of the FCRA is that information must be accurate. If you can find something inaccurate about the charge-off, that inaccuracy can be disputed. Here is a list of inaccurate information to look for.

      The only option I can suggest to get a charge-off from updating monthly is to:

      • Pay the debt in full and request the account be updated to Paid/Closed along with a removal of any late payments after the charge-off date.
      • Pay the debt in full and request the account be deleted from your credit reports in exchange for that payment.

      If you choose to do nothing about the charge-offs make sure you have positive information that outweighs the negative information by padding your credit reports.

  12. Alisha

    November 2, 2015 at 1:29 pm

    So, I am planning on disputing a Frontier account. I originally signed up with Verizon Fios in 2009. In 2010 we moved and cancelled our service since they didn’t service our area. 5 years later (last month) I received a charge off of $82. They said they closed my account in 2015. I don’t know how that’s possible since I closed it in 2010 and haven’t had service from them in over 5 years. They can not verify the original reason why I owe them money except for late fees. They never updated my forwarding address, so I never received a bill. What is the best course of action to get this charge off removed?

    • Lisa Phillips

      November 3, 2015 at 9:54 pm

      The best course of action I can suggest is to contact Verizon’s collection department and explain to someone in charge just what you said here. Since you cannot pay a bill you were unaware of and never received. They may be willing to remove it without a credit dispute. If you get them to agree ask for confirmation in writing as your proof.

      If that does not work it’s time to put a dispute in writing directly to Verizon. I don’t suggest disputing with the credit bureaus because Verizon would probably just verify it as accurate. But if you dispute directly with Verizon they have 30 days to respond just like the credit bureaus or they will have to remove the negative account. In your dispute letter to Verizon request they provide statements for the time they claim you had an account and to show where the bill was sent.

      If they do not agree to delete the charge-off your next step would be a complaint to the Consumer Financial Protection Bureau and the Better Business Bureau. Verizon has a history billing customers at incorrect addresses and refusing to correct the problem. A complaint with the CFPB may be just what is needed to get them to take action to remove it from your credit reports. Be prepared to provide the date and proof of your new address and it would help if you have proof that Verizon does not even provide service in the area where you have resided for the last 5 years.

  13. Asha

    October 29, 2015 at 8:54 am

    I have recently pulled my credit reports to assess how bad off they really are. From what I can tell, outside of medical collections and a satisfied judgement, the biggest thing hurting my credit scores are 3 charge offs that report balances monthly despite being 5 years since charge off. They don’t appear to be with collection agencies and I would like to try removing them instead of waiting 2 more years for them to fall off my reports since they are killing my utilization. What is the first step? Disputing with the CRA? I have other charge offs but they don’t report any recent activity since 2010 or 2011. Should I even address these?

    • Lisa Phillips

      October 31, 2015 at 2:09 am

      Unfortunately there is no legal requirement for creditors to cease updating charge-offs monthly. Even though the debt has been charged-off it is still owed by the borrower. A charge-off allows creditors to get a tax benefit but technically you are still in default.

      It really is a despicable practice some creditors use to try to get you to settle the debt. Other creditors will simply charge off a debt and the last update will be the date of the charge-off. But creditors who choose to continue updating are within the rules of the Fair Credit Reporting Act.

      The only requirement of the FCRA is that information must be accurate. If you can find something inaccurate about the charge-off, that inaccuracy can be disputed. Here is a list of inaccurate information to look for. Keep in mind if you choose to dispute you may unintentionally “poke the bear.” This essentially means you wake up a creditor who was not thinking about you. When you open a dispute investigation with the credit bureaus you will be brought to the creditor’s attention and the accounts could be sent to a collection agency.

      If a creditor transfers or sells a debt to a collection agency both the creditor and the collection agency can report the charge-off. The only difference is the creditor would have to report the account with a zero balance which would help the utilization issue you are experiencing. But it would also mean you have a RECENT collection reporting which will ding your scores.

      The only other options to get a charge-off from updating monthly is to:

      • Pay the debt in full or agree upon a lower settlement amount and request the account be updated to Paid/Closed along with a removal of any late payments after the charge-off date.
      • Pay the debt in full or agree upon a lower settlement and request the account be deleted from your credit reports in exchange for that payment.

      If you choose to do nothing about the charge-offs make sure you have positive information that outweighs the negative information by padding your credit reports.

  14. Rosie

    September 5, 2015 at 6:00 pm

    Hi Lisa, I have question that I have been trying to get help on. I lost my job back in 2012 and went through an eviction process from my apartment due to me being unable to pay. The balanced owed at the time of eviction was $926.00. I ended up moving back in with my mom for months looking for work. The apartment complex sold the account to a college agency. Months later I’m assuming after court fees were assessed another bill was sent with a total balance of $1694.00, this bill included the original balance due of $926.00. I was still out of work and my parents being on a fixed income were unable to help me at the time. So the account was sold again to the same collection agency that bought the account first time. Now my dilemma is that the collection agency is reporting the account as two separate accounts 1 for $926 and the other one for $1694 for a total amount of $2620.00, which is not true. The final bill of $1694.00 sold to the collection agency already includes the previous bill balance of $926.00 and yes I do have proof not only from the original creditor but also from the collection agency that sent me a collection bill with proof of balance for each bill sent separately for the balance due. I have requested the account to be verified in hopes that the credit bureau will see that the accounts are one in the same but of course the collection agency was able to verify them because they bought the account at separately showing two account numbers. Not sure how to word my letter of disputes in order for the credit bureaus to recognize the the final account already includes the past due balance and fees. Shouldn’t it be just one account being reported with the final bill and charges. This is also making my credit report worse as it seems that I have two separate accounts in collections with a larger balance due. Mind you I have since found employment and more than capable of paying off this debt but I don’t want to agree with anything until the correct account and balance has been properly adjusted and reported. Right now if I agree to anything the collection agency will be collected on and account twice. Any help and advice would be greatly appreciated!

    • Lisa Phillips

      September 10, 2015 at 6:08 pm

      I really don’t see why you cannot write to the collection agency and explain to them just what you said to me. Include in your letter the amount you are willing to pay in order to settle the matter in exchange for a deletion from your credit reports. Now they do not have to agree to a deletion but it does not hurt to ask. You can read more about getting collection accounts deleted here.

      The other option is to get some help. Clearly you have duplicate accounts reporting both with incorrect information. This is definitely something the Consumer Financial Protection Bureau can assist you with. You have already tried to resolve the issue with the credit bureaus and the debt collector verified the account as accurate. You have your proof which the CFPB can use to help you resolve the matter. You can make a complaint at consumerfinancial.gov along with uploading the proof to back up your complaint. Tell them exactly what you want in order to resolve the matter such as: I want to pay this amount as settlement in full and I want both accounts deleted from my credit reports as they contain inaccurate information. This option may better serve you because the debt collector will have to answer DIRECTLY to the CFPB. They don’t like dealing with the CFPB. I would go with this option first. Good luck and keep me updated.

  15. Vero

    August 23, 2015 at 10:37 pm

    Does a California auto loan lender have to notify me/ you when they charge off a loan and change the terms?
    I have a car loan I got in 8/08 should have been paid off in 8/13 but I missed lots of payments and they said they would work with me. At some point they charge off the loan. They have not repo it since I’ve been making payments via direct deposit for at least 2 years. I saw it on my credit report that it’s a charge off but I was never notified. I’m assuming they changed the loan terms because as of 10/14 I still owed about $10k.

    • Lisa Phillips

      August 24, 2015 at 12:57 pm

      No, they do not have to notify you. Even though you entered into a payment agreement, there may have been late payments and other fees continuing to accumulate. When you pay less than the full amount due on an account or fail to pay at all the creditor, at some point, can charge-off the account without notification. Unfortunately, even though you are making payments, the creditor still reserves the right to charge-off an account.

  16. Rita

    July 8, 2015 at 10:02 am

    I was off on maternity leave and missed a total of 4 payments, during that time, I lept in contact and gave them the happenings. I resumed minimum monthly payments once I was back to work and paid every month for the next 7 months, but only the minimum payment as that was what I could afford. They have now blocked access ot pay online and I must send a check or call their customer service center to make payment and they informed me the account is now a charge off. Can they do this if I haev been paying something every month? They are now threatning that the accoutn coudl be sold, and I shoudl call every month to see if they sold it or not. I was told the reason they made it a charge off was because I did not pay enough every monh. Meanwhjile this bank I have a different store card through which ahd the same scenerio, and is not a charge off and is actually now in improved accoiutn status…?

    • Lisa Phillips

      July 9, 2015 at 11:31 am

      Well technically the creditor can charge-off the account after 120 to 180 days of non-payment even if you kept them up-to-date. Resuming payments does not necessarily take your account out of charge-off status. The creditor can choose to charge-off based upon the initial 4 missed payments. Making just the minimum payment for 7 months did not address the “missed payments” plus whatever “late fee” you may have incurred.

      It’s really up to the creditor whether they choose to charge-off your account. You might want to call them and request they put you in a hardship repayment program or if you have some extra cash now, see what you can do to get the account out of charge-off status. When you contact them try to talk to someone in management. They can often offer alternatives reps answering the phones cannot. You want to avoid a charge-off like the plague.

  17. Michelle

    December 20, 2011 at 3:07 am

    I was laid off in 2008 and got behind on my credit card bills. When I started working again they told me I had to have it paid off the balance in 1-3 payment or they would do a charge off. Of course I didn’t have that kind of money so they got charged off. Most of them were charged off in april 2009. Some were a little later. I just looked at my credit score and it is a mile long. The companys sold my debt so many times. The ones that were sold are new, they have a 2011 date through the third party. They all say that they are closed but all most all of them have a balance due and a past due balance. Can I do anything or sould I just let the time run out. I’m still not in a postion to pay the debt off.

  18. Tanesha Gregory

    August 1, 2011 at 3:24 pm

    Well, my concerns are layered. I leased a vehicle with a major car company. I paid on time each month. I turned my car in with a zero balance (in terms of monthly payments). The month after I returned my vehicle I got a final account statement via mail indicating that I had a balance of $1,300 for mileage. Fine, I write them a letter saying I couldn’t pay the full amount at once, but I did want to make payment arrangements. I also included a payment with my letter. Small payments were made each month and by the fourth month the account was paid off. Please keep in mind the the original creditor AND their collection agency were contacting me at the same time. The small payments were rendered to the original company and the final payment was rendered to the Collection agency. Recently, I reviewed my credit report and noticed they listed my account as a charge off. The high credit amount was wrong (I’m not really sure what that is) but if my lease was paid off and the mileage is calculated seperately isn’t the 1300 the high amount? The first date of delinquency is listed as the date of my initial account settlement letter. Do I have a fighting chance? Isn’t a charge off when a consumer is making no payments over a period of 180 days. I had the entire matter settled within 120 days. Please advise. Thanks!

  19. rosana senise

    July 23, 2011 at 7:23 pm

    In January 2008, my house was foreclosed on and the house was sold in an auction and the first bank was paid off. I had a 2nd mortgage where I have a charge off of $75,000.00 on my credit report. How can I have this removed from my credit report? Is my only option bankruptcy? Or is there another option I can work on?

    Thank You.
    Rosana Senise

  20. Kelli

    July 19, 2011 at 10:11 pm

    Where can I ask a question? I am curious about a 2nd mortgage charge off with HSBC. Once my ex allowed our former house to go into foreclosure, the 2nd mortgage company never made a demand for payment and when I called to discuss a payment arrangement, the rep stated they cannot legally pursue me for the debt in Georgia, however, isn’t the negative charge off on my report a way of pursuing the debt? I tried to make a payment arrangement that day, but she asked if the house was already foreclosed, and when I responded that it was, she stated they could not pursue me in Georgia. I guess they chose to write it off. One bureau is reporting a high balance and the others are not reporting a high balance. One bureau shows the account as a charge off but not closed. After I disputed the balance, one bureau removed the past due balance. 2 bureaus show it has a past due balance. Can we only dispute the past due balance IF it was sold to a collection agency? Seems like if it was charged off, there would be no past due balance. Again, the company stated they could not pursue collection in Georgia for some reason. I haven’t been able to verify any state rules/laws about that. Maybe it was the instrument I signed. The loan paper I signed did not say anywhere that I was personally liable, only that the house was being used as collateral. Once the house was foreclosed, I guess they couldn’t pursue me personally. Not sure. I never received a demand notice for payment or any further contact from HSBC except the charge off on my credit report. Any advice you can offer?

    • Lisa Phillips

      July 20, 2011 at 2:54 pm

      Your situation is more complex than the average account charge-off because it involves real estate which is a secured debt. You are correct in that a charged off debt should not have a past due balance and it can be disputed; however, in your situation, any success with disputes may be temporary. I strongly doubt the lender is going to be content with simply charging off a HELOC without pursuing you for the debt at some time in the future.

      The best advice I can offer is to contact a real estate attorney in your area, that way you can find out why the lender stated they could not pursue you in Georgia. Perhaps there is some type of moratorium currently in place which is preventing the lender from pursuing you. In any case, I would definitely contact a real estate attorney and preferably one with a background in the Fair Credit Reporting Act.

      Since you mentioned a willingness to pay, you may be in a good position to get that negative mark deleted from your credit reports in exchange for payment arrangements. Again, contact an attorney to see if they can negotiate a settlement. Naca.net has a listing of attorneys by state which specialize in consumer laws, including debt collection, foreclosures and mortgages. Good luck to you.

  21. DLS

    July 15, 2011 at 1:48 pm

    Thanks for responding. The issue is an old repo and I never received a letter saying how much I owed after they sold the car. So I have no idea what they recovered. Keep in mind, I was almost done paying the car off when it happen. Long story and long time ago… The issue is they charged it off in 2005 and the original amount of the charge off versus what is owed now is about $1500 more. On 2 of out 3 of my reports, it shows my high balance as $3400 and current as $4900. When in reality, my high balance was $13,000 and I had paid $14,085 at the time of possession. I am just not sure how it should be reported since each credit bureau is reporting the numbers differently but they all show a charge-off. BTW, there is no collection agency reporting on this account. I am cleaning up my credit and this is the one thing I am not sure of how to approach. I refuse to pay anymore money to them because of how shady they were when this happened and I more than paid what I owed and I am still paying by have the negative mark on my reports.

    • Lisa Phillips

      July 16, 2011 at 12:08 am

      While there appears to be factual errors you can dispute I think you should legal advice from a consumer law attorney first because you never received a defiency balance. This really concerns me because most states require lenders to follow very specific repossession laws or the lender may not be able to offset the loan deficiency of the car loan and collect from you. Each state has their own repossession laws but most involve consumers receiving proper notice of the loan deficiency. You can read more at car repossessions and credit disputes but I would definitely seek legal advice before disputing because your rights may have been violated. Naca.net lists consumer law attorneys by state and some specialize on this very subject. Often you can get a free consultation. Good luck to you

  22. DLS

    July 15, 2011 at 5:20 am

    Hello, Lisa

    Does this advice apply to any account that has been charged off or only for revolving accounts?

    • Lisa Phillips

      July 15, 2011 at 1:39 pm

      The accuracy of any type account can be disputed as the FRCA requires only accurate information be reported by the credit bureaus. So if you discover an error or mistake in the information being reported in any type of charged-off account it can be disputed. Just remember, if the disputed information is verified to be accurate the date of last activity on the account may be updated which would make the negative account look more recent. Recent negative activity is more detrimental to your credit scores than older negative information on your credit reports.

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