Charge off’s

Charge Offs

Charged off accounts or accounts that were sent to collections may be reported for up to 7 years plus 180 days from the date of delinquency. 
Charge-offs occur when a creditor decides a debt is not collectible and rather than carry it on their books as an overdue or past due debt, they instead eliminate it from their reportable past due accounts. 
By charging off the debt, the company gets an improvement in their accounts receivable report. That doesn’t mean the debt has disappeared. In most cases, the debt is sold to a “debt buyer” who pays pennies on the dollar for the face value of the debt. 
By purchasing the debt, the debt buyer can now attempt to collect the debt (plus court fees, interest, late charges, etc.) by contacting the debtor and taking them to court for the debt’s value plus fees.

Comments

Post a Comment

Popular posts from this blog

Credit Repair Myth's

Myth # 1: When I pay off a past-due account, such as a charge off or a collection account, it will show "paid" and no longer be negative. It is difficult to fully restore your credit without paying your outstanding debts. However, paying off a debt can actually hurt your credit. Negative items on your credit report are usually allowed to stay on your credit report for a maximum of seven (7) years. This 7 or 10 year clock begins ticking at the date of last activity or date of first delinquency. When paying an outstanding debt, you can change the account status and the date of last activity which can lower your scores. Myth # 2: If a negative item is successfully deleted from my credit report, it will just come right back on my report. The credit bureaus have cleverly spread this myth through the news media and government agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they have not heard from the credit grantor for 30 day
Read more

What is Credit?

Image
What Is Credit? The concept of credit is nothing new and one that most people have used is some form or another. So, what exactly is credit? Credit is receiving something of value now with the promise to pay for it later. Here’s an example. As a kid, suppose you were in a store and saw something really great that you wanted - a shirt, new shoes, candy - but you didn’t have enough money to buy it. So, what did you do? You begged your parents to buy it and take the money from your next allowance. That’s credit! Or, while at a restaurant you realize you forgot your wallet. Your friend pays for your meal and you pay her back when you find your wallet. That’s credit, too! If you pay back these friendly loans, you build trust with your parents, friends, or whomever else lends you money. This trust helps to build your reputation and increase your chances of borrowing more in the future. This is the same concept that financial institutions, such as banks, use
Read more

What are tradelines

What Are Tradelines? Trade lines are a great tool to use, but they promote a lot of questions. This is a great FAQs page to visit prior to diving into some of the more complicated areas of trade lines. If you have any other questions, please see other categories of trade lines to the right of this text or contact us. According to experian.com a trade line is an entry by a credit grantor to a consumer’s credit history maintained by a credit reporting agency. A tradeline describes the consumer’s account status and activity. Tradeline information includes names of companies where the applicant has accounts, dates accounts were opened, credit limits, types of accounts, balances owed and payment histories. Authorized user tradelines mean only one thing: credit card revolving accounts onto which an individual is added as an authorized user. “Tradelines” are the accounts listed in a credit report, such as mortgages, auto loans, credit cards, etc. An “authorized user” is a person which is
Read more