Can Capital One Update Charge-Off Every Month

can capital one update charge-off every month

can capital one update charge-off every monthQuestion: I recently applied for a home loan and was denied. I was told it was due to recent delinquent activity of an account showing up in my credit report (as recently as this month). When I reviewed my credit report, I found a Capital One account that has been charged off since Jan of 2008, but the problem is that Capital One reports the account as a new charge off every month.

So my credit reports account history reads like this; charged off as of Jan 2012, Dec 2011, Nov 2011, Oct 2011…….well you get the picture. Is this a legal practice? Is this ground for a dispute?

Answer: Welcome to the world of Crapital One credit reporting. An original creditor can update a charge-off account monthly as long as it is accurate information being reported. It is perfectly legal. Most original creditors cease updating charge-off accounts at some time; however, Capital One does not.

Any inaccurate credit information on your credit report can be disputed. If the monthly updating is inaccurate you should dispute it. Typically an account is charged-off 180 days after the first day no further payments were made on the account. The charge-off allows the creditor to declare your debt as an income loss to the company for tax purposes. But it does not end there.

The creditor will add the charge-off to your credit report and they have every right to continue to report the debt. If Capital One sold the account to a collection agency, they would be required to report the balance as zero.

What cannot change is the date the account is due to drop off your credit report. No matter how often Capital One updates the account, 7.5 years after the date of first delinquency (2008), this account must be removed from your credit report.

Of course this does not solve your dilemma. If you are in the market to purchase a home, even if you are approved, any lender will require a charge-off be paid before or at the closing of the loan.

Capital One is not going away with a simple dispute. If by chance they do, they will come back. The best course of action would be to settle the debt. Until you pay the debt, the tradeline will be updated monthly.

You can request a pay for deletion but they are not known for cooperating. You may be able to negotiate a payment plan or settle the debt and request the status be updated to “Paid” or “Settled.”

This would at least give you an opportunity to stop Capital One’s monthly reporting which is causing your credit report to reflect recent negative activity on a monthly basis.

The last thing you probably want to do is deal with Capital One but look at this way…Homeowner vs. Charge-Off.  Homeownership is an investment and much more rewarding.

Take a look at Strategies to Dispute Chase Credit Card Charge-Off to get an idea of how to settle this charge-off and move on. If not, Capital One will continue updating the delinquency date as well as the balance every month so that it appears as a new delinquency.

Once the debt is paid, it will have less negative effect on your credit score and eventually it will not matter at all. The best of luck to you.

2 thoughts on “Can Capital One Update Charge-Off Every Month”

  1. Hello, have you found any changes with this information? I had an auto loan with Capital One but my insurance company totaled the loss out. Capital One charged my account off almost 3 months after my accident. I have been disputing with credit bureaus. I have seen that they had a payment made in 04/2019 of $141, but have since updated sections Payment Received: 04/15/2019 ($0) and Last Payment Made: 04/15/2019. I have argued with TransUnion over the phone for an entire hour about them not responding to my dispute which they have claimed they have and that they do not have to provide me the method of verification results. I had Experian even hang up on me, Equifax appears to be the only company that has removed this item due to inability to respond. Since then I continue to receive “Date Updated” responses. Please advise.

    1. Once you request the method of verification, in writing, the credit bureaus have a certain amount of days to respond. If they send nothing, you have a right to make a complaint with the Consumer Financial Protection Bureau (CFPB), your State Attorney General and even the Better Business Bureau.

      Let them know the credit bureaus are in violation of FCRA due to their non-response to your method of verification request. Let them know the outcome you want which is deletion of the account.

      However, I would start with the first complaint with CFPB, they typically take on the matter and get a response for you within 15 days. That may resolve your issue and you won’t have to pursue any further complaints.

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