Credit Tips: Need General Credit Advice

Posted On: February 22, 2005

Author: cragi
Joined: 22 Feb 2005
Posts: 3
Posted: Tue Feb 22, 2005 3:46 pm
Post subject: general credit help

I have an account that I opened in ‘99 with a $2300 balance in Florida and stopped making payments shortly thereafter. On my credit report, it is showing the account was “verified” 9/02 and that it was sold to Arrow Financial in 5/02.

Arrow shows that it opened in 9/02 and was verified 11/02.

I don’t remember making payments back then, but I remember them pressuring me a lot and I might have.

I remember they were making offers to settle for around $1500. I’m trying to rebuild my credit and trying to decide if I should be looking to charge this off or not. They haven’t sent me any notices for a long time, so I would have to contact them to even see where it all stands…

I’m trying to put myself in position to purchase a home 2 yrs from now…

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Author: NightStar
Board Monitor
Joined: 07 Nov 2003
Posts: 2580
Location: Illinois
Posted: Tue Feb 22, 2005 5:38 pm

If you have not made any payments since that time, 1999 or 2002 then the account is already charged off, meaning the creditor took a tax write off, but they can still pursue you for collection efforts.

All it takes is 6 months of non-payment on credit card accounts for charge off to happen.

You need to find out exactly when you stopped making payments on this account, last activity date is what you are looking for on the original creditors listing. If it don’t show, call the credit reporting agency to ask when the listing is due to expire - then subtract 7 years and 1 month to figure last activity date.

SOL for your state is 4 years, if last activity was in 1999 - then SOL has expired, but if it was in 2002, then you are still within their grasp to sue if they have not done so already.

I don’t recommend disputing this account until you know if you are out of SOL yet, otherwise you may wake them up, and have problems to paying the account if you are not able to pay them at this time.

Best Regards,
Pammila Phillis
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH
501-663-0033 FX

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Author: cragi
Joined: 22 Feb 2005
Posts: 3
Posted: Tue Feb 22, 2005 7:19 pm

Thanks so much for your reply. I guess I’m not too scared about waking them. If the SOL is up, then I assume they still can report this for 7 years, right? Maybe something that old won’t affect me so much looking for a home loan, right?

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Author: NightStar
Board Monitor
Joined: 07 Nov 2003
Posts: 2580
Location: Illinois
Posted: Tue Feb 22, 2005 8:09 pm

It might not affect approval, but it may still affect the rate at which you are approved… some mortgage companies may require the old debt to be paid before approval can be complete.

The older the account the less affect it is having on the credit score.

And yes, they can report the account 7 years from the last activity date. You should check the listing to make sure that all information is correct, dates, balances, and status of the account. Dispute anything that don’t look right, if you are lucky sometimes disputes can result in deletion of the negative item.

Very likely the mortgage company will wake up the collection agency for you, we use to do RMCRs (residential mortgage credit reports) here, and what that meant is if there was a listing on the credit report containing balance, and not having been updated within 3 months we were obligated to call the collection agency or creditor to find out what the most up to date information was on the account. Usually once that happen the collection agency would have their hand out asking the bank to work it that they got paid, especially on refinance loans.

It would be better if you can deal with the collection agency before the mortgage company sees the listing and gets the ball rolling. If you try dispute before loan and it gets deleted, then fine… but if it comes back verified, there are a number of other tactics you can try. Like requesting debt validation, to see if the collection agency can prove the debt is yours, if not then maybe they will willingly remove the listing themselves. If they can prove, then maybe move forward to settle the debt with them, in exchange for deletion of the account listing from the credit report - that would help too just as long as it is missing, you have better chances of getting approved with a decent interest rate.

Best Regards,
Pammila Phillis
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH
501-663-0033 FX

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Author: cragi
Joined: 22 Feb 2005
Posts: 3
Posted: Tue Feb 22, 2005 11:13 pm

Hey Nightstar,

Thanks again; this is just what I was looking for I think. Time isn’t an issue with me as I have about 2 years til I’m looking for a house, so I don’t mind alarming the CA.

I couldn’t find an easy way to request the detailed info from Transunion on the SOL.

So basically I should dispute anything suspicious, then write a debt validation (should I just skip to this step?), and if necessary, settle. If it comes to settlement, you say I can do this in exchange for deletion of the account.. are you saying its possible for them to completely wipe this off of the reports in exchange for payment?…or will it just show that account has been paid and closed?

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Author: NightStar
Board Monitor
Joined: 07 Nov 2003
Posts: 2580
Location: Illinois
Posted: Wed Feb 23, 2005 9:32 am

You can just call TransUnion customer service, and ask the rep on that account when it is due to come off of the credit report, they should give you the month and year of expiration.

2 years is a good amount of time for you to work with cleaning this off of your credit report.

You can disptue with the credit reporting agency anything you find wrong with the reporting… balance, dates, status, … anything.. just keep picking at them.

If you are not adverse to possibly paying this account, then you have nothing to loose by trying debt valdidation request. There are sample letters on the internet all over, you can just take one and edit it for your purposes.

If it comes to settlement, yes it is possible to try and negotiate payment for deletion. Not always guarenteed, but it is worth it if they will consider that. Just make sure you get agreement in writing, if you settle for less then full balance, then also make sure they agree not to sell or assign any remaining balances to other collection agencies. They don’t have to agree to deletion, might be that they will only show settled, if you have to have it updated to show paid, then try to get them to report paid in full, and not settled for less then full balance on the credit report. That will look better to the mortgage lender.

Best Regards,
Pammila Phillis
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH
501-663-0033 FX

View our latest credit card ratings!