How should a Charge-Off show on Credit Report?!?!?

[Guest]

Capital One shows a charge off on my reports.

This account charged off in Oct 03.

Eq shows charge off April of 04 past due 1564

Ex shows as Charge off/Write off $1166 written off.

$1564 past due as of 4/05

TU says charge off.. past due 1564.

Now on all three reports it shows as Charged Off.. but the past due balance keeps getting larger every three months because they are reporting the added interest.

I only have 1 other charge off on my report.. for a car loan and it shows 0 balance but then says PAID charge off

What is the correct way to report this??

This is rather important to me because if I could get Cap One gone.. Id only have 2 negs on the entire report.

Thanks in advance!

[willingtocope]

Here's an answer I've posted before, but its an oldey but goody...

I've tried to do some research on the term "charge off", and while I'm not sure I have all the answers, here's what I've learned...

"Charge off" is an accounting term that basically means taking a charge against income on a company's P & L statement. Its tied up in IRS / UCC / and general accounting practice rules. Depending on the company's own internal accounting procedures, some continue to charge interest and others don't. The problem is that if they do, they have to continue to report income...and should they ever sell the debt, they'll have to back that income off their books. On the other hand, if they don't charge interest, selling the debt just generates income...easy to account for.

Now, if your CRs show "Charge off / sold to another lender" then they have indeed deducted the debt from their income tax (as a loss) and realized whatever income they sold it for. So, they should no longer charge interest on a sold debt. And, for that matter, your credit report should show a $0 balance, since you no longer owe them money.

and a little more at:

http://www.debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=29227&highlight=charge

...its all part of the game. These guys have a different logic than us normal people...

[Guest]

well it says Profit and Loss write off as well.

So does that mean they can continue to charge interest and add it to the report or they have to report the 0 balance.

Most charge-offs I have seen show a 0 balance.

Cap One hasnt sold this debt.. or even tried to send a CA after me since I DVd the very first one.

I am just wondering what the heck is going on and how this all works.

Thanks again.. ya'll are the best

[willingtocope]

So does that mean they can continue to charge interest and add it to the report...?

Yep...as near as I can tell, that's exactly what it means. It seems to be related more to how they report it to the IRS than any rules or guidelines of credit reporting...