My mortgage loan officer recently pulled my credit report and tells me that an original creditor is now reporting that I am currently late on an account charged off back in 2012. I am told this may be a problem in getting approved for a mortgage. Is this legal?
Charged off is an accounting term. When a debt is charged off, that does not mean that they have forgiven the debt.
As long as what the creditor is reporting is accurate, then your only option may be to settle the debt. After the debt is settled, it should then be updated on the credit report to show that is has been settled.
The debt may be past something called the 'statute of limitations' so you should consult a local attorney about what options make sense for you before paying any money to the creditor.
My answer to this question is for general purposes only and does not establish an attorney-client relationship and is not legal advice. You should contact an attorney directly for legal advice. We are a debt relief agency and we help people file for relief under the Bankruptcy Code as well as resolve other debt issues.
I think you may want to share a copy of the relevant page of your credit report with a consumer rights attorney. Are you saying that this account was reported differently up until recently?
Charge-off is meaningless to you; it's an accounting term used by lenders. For prospective lenders it just means that there was no payment made for 180 days and the lender took advantage of the ability to list is as a "charged off" account in their own profit and loss statement.
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