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Posted in Auto Loans
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Preston2008

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"Charged Off" Auto Loan from 2010
I had a car repoed in the middle of 2010 and it says "Charged off" on my credit report and it will not be removed til 04/2017. My dad said he paid the sum off between then and now. How would I know he did so? Would there be another collections account for the auto loan on my report or was at one point before he supposedly paid it off? That's the only item that relates to it on my report. Thanks!

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Get proof that your dad paid it!!!

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Items that are in default for about 120+ days are usually charged off.  Once they are charged off, they will also say zero balance if the original creditor sells the debt to a collection company.  However if they decide to pursue the debt themselves, then can forgo selling the debt and simply transfer the debt to their collections department and leave the balance listed on your credit report.

Notice that a debt is STILL an obligation even after the original company charges it off and you will likely be contacted by collection companies from this point on to collect the entire balance.  Unfortunately once an item is charged off you will never have an opportunity to bring it back to a current status.  If you father really did pay the debt off, then there would be proof of that payment - get a copy of it, because it is all that stands between you and another collection call should the debt be sold to another collection company later.

In addition to that set of news, charged off accounts will be on your credit and part of your score for up to 7 years after your last payment, or in some states, up to 7 years after your last payment arrangement; even if that payment or payment arrangement is with a collection company 6 years after your last payment with the original creditor.  So even if your dad 'did' pay off the debt, it will likely be listed on your credit, because I doubt he agreed to pay the item only if they removed it from your credit report.

Reply by
Preston2008

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I figured if he didn't pay the debt that their would be another item on my credit report from a collection agency with the amount being owed? So that's why I figured it had been settled since there isn't anything else besides the original one from the bank on my credit report that says charged off. Does that sound right? Or that doesn't matter? Thanks for your time! Just trying to figure it out BEFORE I ask my father about it.

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Response to your follow up question

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Not all collection companies report to the credit bureaus.  Credit reporting costs a company money to do and therefore it isn't 'required'.  So if the original creditor charged the item off and sold the debt to another collection company that doesn’t report to save money for their company, your account will show the original report with a zero balance and a note that says something like "sold" or "transferred" in the comments and no other accounts. 

But if that collection company sells the debt again to another collection company that does report, it could suddenly appear on your credit report destroying your credit.  Just a risk you take when not paying your obligations for whatever reason. 

Be sure to know your state’s statute of limitations in case another collection company picks it up and be prepared to deal with it at some point if you think it maybe unpaid or still out there.

Reply by
Preston2008

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Helpful to 1 out of 1 people

I see what you're saying. In the remarks on my credit report it just says, "unpaid balance charged off". Guess I won't technically know anything unless I call and find out possibly. But I have no information the account or anything anymore. Don't want to call and then reopen it as well. Stuck between a rock and a hard place -_-

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