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Advice on dealing with old and charged off debt accounts - The Bills.com Blog
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Advice on dealing with old and charged off debt accounts
Question: I have a lot of OLD debt alot is old charge offs and i just checked my credit report and it only shows the collection companys and not the original debt. i have been reading alot about the fact that charge offs come off your credit after 7 years from the original delinquent date now how do i find that out if they all show to be open whenthe collection company bought the debt. So should i contact the colection agency or what should i do to find out how old the debt is and when it will come off my credit? I have been living with this for years and i want to clean it up i just want to know the best way to go about this thank you.
Answer: You are correct in thinking that most debts will be removed from your credit report seven years after the date of charge off. ?Charge off? is an accounting term used by creditors, meaning that a creditor has transferred an account from its ?accounts receivable? books to its ?bad debt? ledger?credit card issuers are required to do this by the federal Office of the Comptroller of Currency, in an attempt to prevent banks from inflating future earnings statements with old and defaulted accounts. For the consumer, the only real consequence of an account charging off is that the account will report as a negative item on the consumers? credit reports. As mentioned previously, charge off accounts are required to be removed from your credit report seven years after the date of charge off, so these old accounts will not damage your credit rating indefinitely.
The best way to determine the charge off date of an old debt is to obtain a copy of your credit report from each of
the three major credit reporting agencies?Equifax, Experian, and TransUnion. Your credit reports should list the date that each of the accounts in question was charged off by the original creditor. Even if the accounts have been sold to third party since the date of charge off, your credit reports should still reflect the original date of charge off, as that is the date upon which the credit reporting time guidelines are based. Third party debt collectors are not legally allowed to change the charge off date for an account that they purchase, so the fact that your accounts have been purchased should make no difference in the length of time these accounts will appear on your credit reports. However, debt purchasers have been known to try to change dates of last payment and charge off in an effort to keep old accounts on consumers? credit reports longer than legally allowed. If you think that a debt purchaser is reporting an inaccurate charge off date, you should first contact the original creditor to determine the date you last made a payment on the account. Since creditors charge off accounts between 180 and 240 days from the date of last payment, you should be able to roughly determine the charge off date if you know when you last made a payment on the account. If a debt purchaser
is reporting a charge off date that is different from that being reported by the original creditor, you may want to dispute the credit report listing with the consumer credit reporting bureaus. The Federal Trade Commission offers a guide to disputing credit report errors on its website.
Once you have determined the actual charge off date, and confirmed that the account information is reporting correctly to each of the three credit bureaus, you should be able to determine when the accounts will fall of your report. The accounts should be automatically removed from your credit report seven years after the date of charge off. As mentioned above, it is important that you verify that the information on your credit report is accurate to make sure that these negative accounts are removed from your credit reports in a timely manner.
To learn more about credit, credit reports, and credit scoring, I encourage you to visit the Bills.com credit help page . I wish you the best of luck in resolving your credit problems, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com
Also, make sure to get a free financial health check-up with Bills IQ!
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1. Posted by Linda Hilton on Sunday 27th April 2008 13:16
The 7 year period starts with the first delinquency you had not the date of charge off. You can find this reference in the Fair Credit Reporting Act Section 605 (a)(4) and 605 (c)(1).
2. Posted by Wendy Walters on Thursday 28th August 2008 06:22
I have a "charge off" ,and I am paying a third party collections agency. Once this is paid will the charge off still be reported as such? What is the best route to take for me to get this taken off my credit report?
3. Posted by Bill on Thursday 28th August 2008 17:33
Once you pay the account in full, it will be reflected as a closed account with a zero balance and will stay on your credit profile for another 7 years. There is not much you can do to get it removed before that time unless you hire the services of a credit repair firm, but even then, if it is a valid entry, i doubt that you'll be able to remove it. If you are looking for a credit repair firm, a good firm is LexingtonLaw.com.