Credit Card Sent to Collections

2 questions:

1) Has it been charged off?

2) If it has been charged off, the collection agenct might be working for the credit card company, which is not the same as the debt being sold to the collection agency. If it has not been charged off, the collection agency certainly is working on behalf of the credit card company.

If it has not been charged off, yes, late fees and interest will continue to accrue. If it has been charged off, no more fees or interest will be added by the credit card company. Not sure if the collection agency can add some sort of fee to it.

Usually, but not always, once a card gets 90 days past due it will be closed by grantor, meaning, she can never use it again (even if she gets current).

If it's charged off, there is usually a code that says "charged off" or something similar. However, there can sometimes be a reporting delay.

Is this something where you/her are going to contact the card company/collector and arrage to get it handled, or are y'all just going to lay low? I only ask because if it's something you/her are going to handle, call the CC company and ask them directly what happened.

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It is crazy sometimes when a card company don't care about getting paid in full....they would rather not bother and let collections chase you, instead of accepting full payment and removing their negative credit from your repor

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It makes perfect sense. Collection companies exist for a reason. Cost.

But I understand where you're coming from.

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It makes perfect sense. Collection companies exist for a reason. Cost.

But I understand where you're coming from.

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But, when someone finds out about the mistake and calls to offer you full payment, it costs them nothing at that point to accept and delete the credit damaging info. Shouldn't the person be rewarded for getting full payment, albeit late?

Regardless, it's a rat race that sucks for the consumer who wants to do right by paying.

No they should pay and the negative should stick. a negative doesn't affect your credit for that long if it is paid off.

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It is crazy sometimes when a card company don't care about getting paid in full....they would rather not bother and let collections chase you, instead of accepting full payment and removing their negative credit from your report

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I don't think this is it. Trust me, they want to get paid - especially if the balance is big enough and they sue someone for it.

The banking regulators require the account to be charged off when it's 180 days late.

If the charge-off is paid in full, the late payments won't be generally removed from the credit report, however, the account will be changed to something like "Charge off - paid in full".

The problem is that the FICO score system doesn't really treat a charge off - paid in full any better than it does a plain old charge off.

To me, if someone has a charge off then works to get it paid off, they should get some benefit from that. There should still be some sting on the credit report - after all, you did go late - but it should be better than not paying it at all.

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a negative doesn't affect your credit for that long if it is paid off.

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Not true. Your FICO score won't benefit at all if you pay it off. It will affect your score for 7 years from the "date of first delinquency" which is the first late payment that eventually caused the charge off. The only thing that will change is they will note it on your report something like "charged off, paid in full" which LOOKS better to future creditors if they can look past your FICO score. Some mortgages require you pay off any charge offs that are on your report because they can still sue you until the statute of limitations passes. The only case where paying a charge off helps your score is if it's a revolving debt that's counting against your revolving debt utilization.