Car Loan Paid on Time for 5 years was charged off!!!

[alexandriaz]

First, let me introduce myself, my name is Kristine, this is my first time posting but I've been reading posts and gathering information on my quest to clear up some bad information listed on my credit report. I had a car loan, paid it on time for five years, never 30 days late, there were times when I didnt pay it on the due date and so was like 20 days past due date, I always paid a late fee when this occurred. I had two deferrements , one when a medical emergency and the other was Christmas time. The problem I have is this: I thought I had paid my last car payment in February, was planning on buying a new truck, couldnt wait!! first car loan was high rates due to bad credit but I did my best to clear it over the five years. I pulled my credit report to check it over and was SHOCKED to find my Americredit car loan listed as a negative, listed as 120 days late and as of January 2007 charged off $518.00!!! I couldnt believe my eyes, I called and was told that the loan became due as of October 2nd 2006, even though I still had a balance due, I thought that was because of my deferrements, I always paid online so never really opened my statement. I continued to make a monthly payment in October, November, December, January and February. No one called me to tell me it had become due and payable, no one sent me anything in the mail letting me know this, had I known this I would have paid the final amount due instead of having it listed as a negative, on my credit reports it shows five years of on time payment with exception on two 30 days late which are incorrect, one was when it should have been in deferrment 12-2004 and the other one was in 9-2004, and that one I only made a $150.00 payment, not sure about that one but I made that amount before the due date so there had to be a reason for the amount. I disputed the charge off and the late payments as I have bank statements showing when I paid my payments each month. The loan company refused to remove the derogatory information, now I dont know what to do. My credit score was in the high 600s but now has gone down to 508, I do have two credit cards with high balances so I have paid them down to less than 45% of the balance. The only other negative listings are four student loans from Salie Mae, I am having them deduct from my checking account now so its been brought current, I am hoping I can clear up my credit enough to bring my score back up over 600 in 6 months then i can get a loan from my credit union but in the mean time does anyone have any suggestions on what I can do about my car loan? I would hate to have the whole five years deleted from my report when its been good all the way up till the last three months? Any help, idea, suggestions would be appreciated. I am planning on a long road ahead and lost of hard work to clear it up. Also none of my creditors ever notified me they would report me to the credit bureaus with exception of the student loans.

thanks everyone!!!

[kevin3344]

I thought that was because of my deferrements, I always paid online so never really opened my statement.

There is a lot going on here, but this much I know: if you don't open your statements every month, you can really get lost with all the deferments and partial payments. You say you made a $150 payment before the due date. Was it for the total amount? Because if it wasn't that won't help you.

However, it seems that the charge off/ending balance is a separate issue from your payment history. Did you not know you had a balance remaining? You said that there was a balance of $518, was this from the deferments?

I don't think they'll be able to correct the history, but if you paid this loan in full it should say "paid/closed". You can challenge the status with the CRAs, if indeed it is paid.

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Edited September 9, 2011 by kevin3344

[ghorn]

I can't help you with this problem but I can tell you the exact same thing happened to me with Chase and car loan I had through them. I ran into some finincial hard times and they agreed to an extension . Even though I paid as agreed according to the terms of the extension, when I finished paying off my car, that account was listed as "paid charge-off". Like that's gonna do me any damn good! I paid on time for 5 plus years and I get this listed on my report? I'm still looking into my options and if I come across some information that might be useful to you, I'll let you know. Good luck.

[momof5]

The down side of not opening the bill.

Deferrments are a real killer....in addition to the deferred amount, the actual interest paid increases (dramatically if you do this early in the loan!)! For me, when the note became due, Citifinancial refinanced the balance (at 15% whereas the original subprime car loan was at 23%) .

The really bad thing with the 'deferrments' is they do not give you the whole picture....all you feel is the temporary relief of the payment not being due right now......

[newbie7069]

Just to add, we had a Americredit car loan and I was told by them that any time you do not pay your payment on or before the due date they tack on a daily interest fee (which in our case was like $20 a day). I've read other threads about them where people were in a similiar situation and thought they made all of their payments only to find out that there was a lot more owed at the end and it was all interest payments. Luckily for us though our TL is reporting correctly and we only had the loan for about 18 months.

[kevin3344]

Also none of my creditors ever notified me they would report me to the credit bureaus with exception of the student loans.

In your agreement when you signed the contract for the car, there is usually fine print that says 'your payment history could/will be reported to the credit bureaus'. Even if it wasn't, though, you can pretty much bank on the fact that they can/will report you if you go deliquent.

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Edited September 9, 2011 by kevin3344

[June]

AlexandriaZ, I can't help either, but I would like to add my .03:

Consumers should NEVER ever accept a deferment agreement, UNLESS it is in writing !!! From my experience, the OCs (computer) will continue to treat any deferred payment "as due and payable" where the Customer Service Rep had APPROVED a deferred payment via telephone.

Did you get the deferments in writing each time?

I find that deferments should be in writing. This way you may dispute with the OC and the CRAs with supporting evidence. Even then you will most likely lose.

Here's my story: Our contract states that they would defer a payment once a year. Their CSR had agreed (via phone) to defer a payment (during the holiday season). Wow, that was easy!!! Huh?

Well, within days, I had received their Delinquency Notice that the payment was "past due" and the OC demanded payment NOW. This was before the expiration of 30 days. Needless to say, I was completely shocked!!! But that was a red flag and a blessing in disguise for me. I immediately forgot about the deferment and mailed my payment (plus late charges), before the account was "30 days Past Due."

No disrespect intended for anyone, but I always open all my mail timely. Without that computer generated Delinquency Notice I would have been screwed. Big time.

[SecretAgentWoman]

I always paid online so never really opened my statement...

...no one sent me anything in the mail letting me know this, had I known this I would have paid the final amount due instead of having it listed as a negative...

No offence, but if you made it a habit not to open your statements than how can you say they never sent you notice?

[Methuss]

A clarification you need to understand. Deferred payments are still late for credit reporting purposes. All a deferred payment agreement accomplishes is that the lender agrees not to reposess the property while the deferrment plan is in effect.

Unless you renegotiate the entire loan agreement and sign new paperwork, the original terms stand.

[CantCU]

When the vehicle was considered paid-off, where was the title? My first red flag would have been when I did not receive the title soon after the pay-off. Were there any more bills after you thought it had been paid off? I would have definitely opened those just to see why they continued to write.

If it is something you owe, try to negotiate to pay it and get it taken off the credit report. Being nice at this point might work nicer than getting angry over the situation. A dererrment generally just delays your payment to the end of the term of the note...and usually there is a fee involved to defer...usually the interest for that month's payment. I would try to get someone on the phone that can explain exactly how much you owe, what it is for, and then try to settle it out with them.

[momof5]

Methuss,

With Arcadia -> Transouth -> Citifinancial (kept getting bought out....), when they deferred a payment, it was moved to the end of the note. The agreement was faxed to me. At that time, the account was brought current in their system so the did NOT report a late payment. The problem is that when you defer a couple of paymentsduring the life a loan, many assume that you then sequential pay them after the original maturation date (assumes that the loan maturation date is changed as well) and this is NOT the case. What consumers who have done this find out is that the additional interest and the deferred payments all come due at the original maturation date, creating a balloon payment.

I learned it the hard way and now pay all my car payments by automatic draft (always cognizant that I better have funds in the account on the 15th)!

[alexandriaz]

In your agreement when you signed the contract for the car, there is usually fine print that says 'your payment history could/will be reported to the credit bureaus'. Even if it wasn't, though, you can pretty much bank on the fact that they can/will report you if you go deliquent.

I don't mean my credit history, I meant when they made the negative report to the credit bureau they didnt send me notice that they were reporting me to the credit bureaus for being late. I was never 30 days late in the entire five years of the loan. I read somewhere on this site that it was the law they had to inform you that they would be reporting negative listings to the credit bureaus. My car loan company didnt, when I was late on my student loans they sent me my statement saying I was now so many months past due and they would be reporting it to the bureaus. I do understand that with most companies they do report to the credit bureaus. I never went deliquent. thanks for the info though.

[alexandriaz]

The down side of not opening the bill.

Deferrments are a real killer....in addition to the deferred amount, the actual interest paid increases (dramatically if you do this early in the loan!)! For me, when the note became due, Citifinancial refinanced the balance (at 15% whereas the original subprime car loan was at 23%) .

The really bad thing with the 'deferrments' is they do not give you the whole picture....all you feel is the temporary relief of the payment not being due right now......

I should clear up a few things, when I said that I didnt open the bill I did view my account online, I paid my payment on the 30th-1st of each month online so I would always check my account. Kind of like paperless billing, when the statement came each month I wouldnt open it right away and sometimes not at all but I still had access to my acount information. As for the deferrments, my loan was first opened in May of 2001 so it was almost 3 years later that I requested a deferrment, I have both of them in writing and I was told that the mature date would be moved up two months for the first then another two months for the 2nd one which should have been Feb. 2007. I just dont remember receiving anymore statements after October. My concern is this: No one from Americredit ever contacted me be it mail or phone that my loan had become mature and if I didnt not pay the total due then they would charge it off even though they were still receiving monies each month. Most companies dont charge off an account until they're atleast 6 months past due, then they send it to a collection agency, mine didnt, instead they didnt even try to collect what they said was "past due" and just charged it off ruining my credit for who knows how long. If someone from this company had called me on the phone and told me, "this much is due and payable now or it will be charged off" I would have paid it. When I discovered this has happened and that there had been a balance still due after the mature date I thought it was from the four months of deferrment however it wasnt, it must have been daily interest rate until it was paid.

[alexandriaz]

No offence, but if you made it a habit not to open your statements than how can you say they never sent you notice?

I didnt always open my monthly statement each month because I had my account online and paid it online and could veiw my account any time I needed to which was every month. Before this company charged off my account and reported me as being 120 + days late, no one from that company notified me that I was late or that the loan had become due and payable, thats what I meant. I had paid on time for the entire loan, and if only a representative from Americredit had only called me on the phone asking me where my final loan payment was or sent me a letter asking for it I would have gladly paid the final amount but I didnt know this and there wasnt anything on my online account about it maturing at that time. I thought it matured in Feb. 2007 and thats when I made my final payment. The loan is paid but I have yet to receive my cr title nor has it been reported as being paid. They listed my last payment as 2-2007 but listed it as a charge off not paid.

[alexandriaz]

When the vehicle was considered paid-off, where was the title? My first red flag would have been when I did not receive the title soon after the pay-off. Were there any more bills after you thought it had been paid off? I would have definitely opened those just to see why they continued to write.

If it is something you owe, try to negotiate to pay it and get it taken off the credit report. Being nice at this point might work nicer than getting angry over the situation. A dererrment generally just delays your payment to the end of the term of the note...and usually there is a fee involved to defer...usually the interest for that month's payment. I would try to get someone on the phone that can explain exactly how much you owe, what it is for, and then try to settle it out with them.

I am sorry I think I need to clarify the deferrment thing, the deferrment months were added to the end of my loan, it did delay my mature date by four months, which was October 2006, but I still showed a balance so for some reason I thought it was due to the deferrment months. it wasnt. My concern here is that the company charged off the remaining balance without letting me know this or giving me the opportunity to clear it up, instead they listed it as being late Oct, Nov, Dec, Jan and Feb. even though I was still sending them a car payment for each one of those months, how can they charge it off if I am sending them money? Or not even letting me know they're going to charge it off? I would have paid it, I dont remember what month I recieved my last paper statement but in January when I tried paying online it wouldnt let me said something about the status of the account, I just thought it was because it was near the final payment, said my final payment due was 187.00. I dont feel they will remove any of the derogatory remarks from my report so I am hoping that my score will come back up enough so I can get a loan through my credit union. It only needs to go up to 560 to get 15% which isnt good but is better than 22% which I had this last time. I wont give up, who knows maybe they'll take off the charge off, I just dont want to have the whole account deleted, it was five years of on time payment, it should have been a positive account.

[alexandriaz]

There is a lot going on here, but this much I know: if you don't open your statements every month, you can really get lost with all the deferments and partial payments. You say you made a $150 payment before the due date. Was it for the total amount? Because if it wasn't that won't help you.

However, it seems that the charge off/ending balance is a separate issue from your payment history. Did you not know you had a balance remaining? You said that there was a balance of $518, was this from the deferments?

I don't think they'll be able to correct the history, but if you paid this loan in full it should say "paid/closed". You can challenge the status with the CRAs, if indeed it is paid.

I didnt open my paper statements but I viewed my statement online each month. That $150.00 was what I was told was due, see once when I went to call to make a payment by check on the phone I was told that I had late fees, when I asked her how I could have lates fees of 140.00 when I always paid more than the monthly payment each month she checked for me and told me that because i had been sending more than the payment due it messed up what was in the computer, didnt really understand what she was saying but she was the one who told me that that months payment due was $150.00, found my statment for that month 9-2004 and had written all correspondance on the statement, who i spoke to, the time, the converstation briefly. My car loan is paid in full but they havent sent me my title yet nor have the showed it as being paid, they listed my last payment as being in 2-07. AM I stuck with this bad mark? after paying on time for five years? I think I'll call back and speak with someone else there, see what they can do. If I dispute this do I have to have the entire charge off removed or can I ask for just the charge off be removed?

[June]

Alexandriaz, since this one derogatory remark had immediately brought your credit scores way down, think about suing them for damages.

[alexandriaz]

Alexandriaz, since this one derogatory remark had immediately brought your credit scores way down, think about suing them for damages.

The thing Im trying to find answers to or help to is not the deferment part of this but the fact that the company who held my car loan didnt even bother to let me know about this final payment being due but instead continued to take my payments each month for four more months but yet turns around and charges it off even though they're still being paid. Most companies dont charge a loan off until its atleast 6 months past due and then they usually send it to a collection agency then charge it off but Americredit charged it off after three months even though they recieved a payment for each one of these months, I never was informed they were going to charge this off until i went to check my credit. I want to know what I should do to try and get them to remove the charge off from my account, I dont want to request they remove the whole account. Its been in great standing the whole five years. How do I get this charge off from my account? anyone????? Its incorrect. I've disputed it once but they said its staying. Now what????