I've been trying to recover my credit over the last 3 years. Up 200 points, and now able to get new credit, including from a bank that had a debt listed as "account closed at consumer's request ... charged off account". Recently, I got a letter that they had sold the account (with last activity well over 5 years ago) to a collection agency. I got a letter from the collection agency offering to settle for a few pennies on the dollar. Naturally, I do not intend to do anything at this point in time, since the statute of limitations was over a long time ago, and if I pay now, it will still show up as a charged off account, but it will be on the credit report for another 7 years, instead of going away in a year or so. Also, I am not even sure about the debt, since there were a bunch that kept getting transferred from one bank to another. I tried to pay off the account about 2 years ago, and was told that I had already paid it off. I think I may have paid it off to another bank that was handling the same debt at one time or another. But, they said I had paid it, and they did not hold it against me when I recently applied for a big line of credit with them. They also added about 50% to the debt right before they sold it, but the amount that the credit agency is claiming is more like the original amount. Anyway, what should I do? Just ignore it and hope that the collection does not show up on my credit report and badly damage me? Since the debt is over 5 years old, I doubt if any mention of it will do too much damage, but I sure don't want to pay it and then have it on the report for another 7 years.
First of all, paying it should not legally result in reporting for another 7 years. Under FCRA, negative items can only be reported for 7 years (plus possibly 180 days) from the original delinquency date. Paying it does not change that. If you may have paid it already, then dispute and request validation. They should obtain validation of the debt from the original creditor. If the original creditor's records show it as paid, then they have no right to collect further.
Well, I'm not sure if I understand all of this. I've looked over my credit reports, and I have one case where I stopped paying in 2002, but I settled, for less than the full amount, in 2003. My report shows 2003 as the last reported activity. Now, as far as this new problem is concerned, I really don't care about the money. The debt was for about 1000, but the last report said 1500. I don't know where they got the extra 500, but I assume it was by adding interest onto the debt (probably illegal). In any case, the last activity was over 5 years ago, thus beyond the SOL. Now, I get this letter stating that I can settle the debt for about 40 cents on the dollar. That, to me, now, is trivial. If I could actually make this go away, and improve my credit score, I would do it in an instant. BUT, I am afraid that if I settle, the credit report will report the last activity as Sept 2006!, instead of 2001. What should I do? If I can really make this nightmare go away for a few hundred dollars, as indicated by the letters from the collection agency, it would be a great thing. BUT, I've worked very hard to restore my credit score from about 505 a few years ago to almost 700, and I don't want to do anything that will jeopardize that, since I need at least 760 to buy my next home, since I am self-employed. Thoughts, suggestions?
If you stopped paying in 2002, that date sets when it must come off your reports even if you had later activity, such as paying it, in 2003. Check with the CRA to see when it is due to come off. If you settled it, you don't owe more. Did you get your settlement terms in writing? Did they make you an offer to settle, in writing, from which you paid? Is this the same CA attempting collection again, on amounts beyond what you settled for, or a new one?
No, the debt that had the last activity in 2002, but which was settled in 2003 was a totally different matter. Different debt, and I dealt directly with the original creditor. I don't know if I got anything in writing on that one, but it is over and done with, and shows settled legally for less than the full amount. My concern was that the last regular payment that I made on that account, but the last activity date is in 2003 when I actually settled for less than the full amount. My concern with this new debt, which had a last activity in 2001, and which is showing up as charged off by the creditor in 2001 was sold to a collection agency a month or so ago, and now this collection agency is coming after me for a debt that was charged off by the original creditor (who actually got it from a different bank when the original bank went out of business, or merged, or something). Now, the CA who purchased the 5+ year old charged off account is coming after me, but stating that I can settle for about 40 cents on the dollar. I know they can't actually do anything to collect the debt, since the sol has rung, but I don't want this to show up as a collection on my credit report, and I especially would not want to pay the 40 cents on the dollar, and then have the collection report, or the fact that the debt was charged off, show up on my credit report for another 7 years from when I pay off the ca. What is the best thing for me to do to keep my credit report, which is starting to be extremely good, go back down the drain after 3 years of perfect credit? (The score is still not that good, but it almost into the 700's.)
If it was charged off 5+ years ago, it should fall off your reports in about 2 years whether you pay it or not.
My concern is that if I just ignore the CA, I will have a collections show up on my credit rating, which, I suspect, will damage it. I've been trying to rebuild it for over 3 years, and am almost to 700 (up 200 in 3 years). If I pay them (the CA) my fear is that the whole thing will show up for another 7 years, perhaps damaging me even more. I don't know. What is the best policy? It may be that even if I do accept the reduced settlement offer from the CA that purchased the account that it will still show up as a collection effort and damage my credit even if I was to pay them. I assume that if I just ignore them, and it does show up as a collection effort on my credit report, that it will have to go away after another 2 years or so, since the last date of activity was in 2001. If I pay, now, I assume the date of last activity would be 2006, and that the collection effort, and the chargeoff would be on my report until 2013. Is that correct? What is my best action? I know that they cannot do any more than threaten me, since the SOL is over, and that I could just tell them to pound sand and then sue them if they ever contact me again. But, in that case, I am sure it will at least show up as a collection. I don't know how damaging that is. If it is only 5 or 10 points, it is probably not a big deal at this point, since I expect to be well over 700 in another couple of months.
The credit reporting period is set by the first date of delinquency. Not by the date of last activity. In theory, paying an account should not extend it's reporting time. See FCRA. However, it is not clear how FICO treats paid collection accounts. A collection account with recent "activity" might act more negatively, as might one whose "status" has been updated recently, depending on whether other fields are missing. Some CAs have been known to "game" the FICO scoring mechanism by leaving information out, resulting in FICO scoring as if it was a recently charged-off account.
I think we got off track from your original question. I have similar situations. I think you have two options here: 1. Since the debt is outside the legal SOL you can send them a Statues of Limitations letter stating the facts and dates of your state. 2 What I would do is send them a debt not mine, and make them validate...they won't be able to. Be sure to send it before the 30 days so that it legally cannot show up on your report. Send certified mail, RRC. Since they sent you a letter, do not ignore them - respond and respond hard. K
I guess I'm still a little confused about the best approach, especially given that I do not want to have a new collection or debt show up and start the 7 year clock again, since there is less than 2 years left. I got a letter, originally, from the original creditor stating that they had sold the debt to a collection agency, and instructing me to not pay anyone else, if I already was, in connection with this 5 year old chargeoff. Then, I got a letter from the collection agency that had bought the debt from the original creditor offering a settlement of 40 cents on the dollar. I know I don't have to pay them, since the SOL is up, but I am afraid that if I don't pay them, the debt will show up as a new, unpaid collection effort and remain on the report for another 7 years. Also, since they just bought the debt, I suppose they might be able to claim that it was a "new debt" and go after me for it. Suggestions? What is the most likely scenario, and the worst case scenario, and where can I get sample letters, if I need them? As I mentioned a bit earlier, it is still a bit confusing since the "original" creditor got the debt from another bank that they took over 6 years ago, or so. 2 years ago, I contacted the bank to try to settle the account, and they claimed I paid it at a time that I paid settled another account for less than the full value with yet another bank. I am wondering if the "original" creditor somehow either inherited the same debt, but somehow realized that it was paid to the previous creditor, and thus settled, but was not reported correctly, or if they were going after me for the difference between the settlement amount on the other account that was settled for less than the full amount. It is quite confusing to me, and apparently to them, but they still went and sold the debt to a collection agency after 5 years. And, they recently increased the debt by about $500 from what it had been since it was charged off, but the reported amount by the collection agency was for the lower amount. Very strange and confusing.
What is happening to you is not unusual --- if you fail to respond via letter the collection agency will list the activity on your credit report --- period. Contest it -- you're overthinking it - just take action and send debt not mine letter/validation letter.
I just pulled my credit reports, and I see that on one report, the debt shows up twice, for two different amounts. It shows up in one case with a charge off amount of about $1000, and a date of status of July 2006. Last payment date is still over 5 years ago. The description is trnasferred to/purchased by another lender.. That lender is the one who has already pulled my credit report, before or coincident with sending me the letter. The other listing in the same credit report shows a different balance, and a description "account closed at consumer's request, still with the lat payment and status of over 5 years ago, for this listing. The other two credit reports show, in one case, about $1000, and in the other case about $1600. That one said $1000 until a few months ago, when all of a sudden it was bumped up to $1600? I suspect there are things that I should be doing to the CRA's too, correct? And, isn't pulling the credit report a violation? How should I address these situations? Mention them in the Validation letter?
Sending DEBT NOT MINE Letter Hi, I have attempted to do this with two companies yet they still keep sending me collection bills. The last notice offered me 40% off the debt. But since I live in NY and have never lived in OHIO ( as they claim)I do not see how they can continue billing me and affecting my credit history. So I intialized formal disputes and still the CA said my dispute was false. I am at my wits end. Do I need a lawyer to work with this stuff because I am not getting any where on my own.
OH Also , I went to myFICO for the score and reports and sadly there was not way to enter dispute information so I have to go back to truecredit for that. Which online service do you use?
AJ, if you do eventually decide to contact an attorney, make sure you are not charged for the attorney's services. Both the FDCPA and the FCRA have recources for the offending parties to pay for your legal expenses (although most settle out of court). Some states, including NY, have a number of attorneys that specialize in no-fee creditor and credit bureau suits; others like my own are not so blessed
"Hi, I have attempted to do this with two companies yet they still keep sending me collection bills. The last notice offered me 40% off the debt. But since I live in NY and have never lived in OHIO ( as they claim)I do not see how they can continue billing me and affecting my credit history." What type of accounts are these? How old are they? Is an Ohio address, at which you never lived, showing up on your credit reports? Have you called the CRAs, and asked them what SSN is being reported for these accounts?
