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Do You Have To Wait Additional 7 Years To Remove A Negative Item If You Settle A Co?


Dariusr
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Since negative items come off your credit 7 years after the last date of payment. Does paying a CO changes the date of last payment to the date you paid the CA or the settlement date. If so does this mean you have to wait additional 7 years from the date you settled in order to get the negative entry off your credit.

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No. An charged off account can only report for 7.5 years from the date of 1st delinquency. The FCRA says this regarding charge offs: "The 7 year period...shall begin 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."

It's important to keep old copies of your credit reports. Usually when the OC charges off an account it is sold or assigned. The CA must provide the DOFD to the credit bureaus so an item doesn't remain longer than it's supposed to. A CO can be sold and sold again, so that's why it's important to know when it first went delinquent, in case a CA tries to "re-age" the debt to make it appear longer than it should.

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Edited by kevin3344
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What if you have no proof of when a charge off took place. For instance, I had a charge off from Verizon about 8 years ago. I have made no payment I now have a CA collecting for this and on my TL is states date opened 4/2005. What does this "date opened" mean? It shows this will continue through 10/2008. I do not have any proof but I know I have made no payments.for over 8 years.

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Which is not to say a lender might re-age teh account, intentionally or not. You need to be vigilant.

Only if you enter into a workout agreement and make 3 consecutive minimum payments. Even the OC cannot re-age an account unless you are making payments again.

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