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How Long Should This Settled TL remain on report? (updated)


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Back in 1998 I started credit counseling. My Discover card balance went from $3400 to about $1700. But in 2001 I lost my job and couldn't pay. That was the end of counseling.

Fast forward to 2005. I got a letter from NAFS and settled for $875. I believe that the account was closed in 1998 because of the credit counseling. But... will this remain 7 years from 2001, or final payment in 2005? I'm hoping that I can DV using the 1998 date.

Kindly requesting advice.

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Buzz. Sorry Grim, that's not correct.

Its stays for 7.5 years from the date of the delinquency that preceded the charge off or collection action. Making a payment/settlement does not reset the clock. So it would stay on for 7.5 years from the date the account got behind (before the counseling) and was never caught up. So it should be 7.5 years from the 1998 date when the account was "closed by credit grantor."

(1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

Many OCs and CAs try to extend it as punishment by fudging the dates, but the law is specific.

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Looking at my reports (Equifax in particular) shows an asterisk in each month from Jan 1999 to Feb 2002. During that time I was doing the credit counseling. Then in Mar 2002, it went 30, followed by more asterisks (I don't recall making payments). In 2003 it went to charge off. TU says it will be removed in 2010.

I'm trying to make sure I have everything right. Does the fact that I went into credit counseling help re-date this back to 1998? My concern is that the account was current when I went into counseling. It remained current until I lost my job a few years later.

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I just got off the phone with Discover. My reports showed the settlement payment, but still showed a balance of $869. Discover first told me that the collection agency needs to call them, so Discover could notify the bureaus. Then the rep gave me to someone else, who said she would make the change herself. They're also sending me a full payment history by mail. Would 120 days be enough to make the clock start earlier?

My Equifax FICO has gone from the mid-500s last month to 640 today. In that time I paid American Express off, got one account deleted, and paid down my bank account line of credit.

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