A little advanced credit reporting 101 here.
We get this question asked a lot:
Can a creditor continue to report a charged off account every month?? And, if so, doesn’t this hurt my credit because it looks like it just happened??
Here’s the answer, and my apologies if it’s a bit complicated.
Basically, a creditor can report ‘CO’ every month, so long as it is in fact a ‘Charged Off’ Account. However, what they cannot do, is update the ‘Date Major Delinquency 1st Reported’, which is in effect the date of the charge off.
However, if that date is renewed, which happens, then it appears as though the account was more recently charged off, hence the credit scores will in fact be more negatively effected than if the date was not changed.
What does all this mean?? It means, if you are engaged in credit repair, either on your own, or working with a credit repair organization, you need to be reviewing those responses.
The devil is in the details gang, and if you aren’t reading those responses, or if the Credit Repair Organization is not reading the responses, you aren’t being as effective at reviewing the credit as you can/need to be.
Make sense??
If not, call us.
Be well,
Credit Dr.
Hey all,
First, thanks for all the work your staff has done to raise my credit i believe neely 200 points!!!
I am a clent and want to disclose that.
Now, I have been told that a negative item posted by a creditor will fall off after 8 years, (is that correct?) However each time the debt is sold from collector to another collector, said that is restarted and the from the sale of the debt each time a new eight-year long countdown begins. That’s one giant hourglass… Is this fact or fiction?
Hey Dan!
Great question.
There are certainly times when a collection agency does try to ‘re-age’ an account, so they can continue to report it; however, per the Fair Credit Report Act; an account, whether it’s a charge-off; collection or a good account, for that matter, cannot report for more than 7-7-5 years beyond the ‘date of last activity’ which is characterized by the date of the last payment.
A collection agency CANNOT change this time frame by merely buying the account. If this were the case, collection agencies would be able to forever report the account. Try as they might, this is not legal.
Take Care Buddy!!