Expert: Yan Ross - 11/4/2009

Question
I had numerous accounts that I fell behind on as a result of an auto accident that left me unable to work.  They were all charged-off and sold to another company.  I have since paid all of these debts with the new owners of the accounts.   But now I have two marks on my credit report, one with the original creditor (as a charge-off) and one with the company who bought the debt from the original creditor.  

My question is once the original creditor sold this account shouldn't they stop reporting it on my credit reports, since after all they no longer even own this account?  I have paid these debts, although many of these new creditors whom I have paid, have not updated my credit reports yet.  I read somewhere that collectors are required to withdraw reporting of an account as soon as they sell the account.  But I'd like to know if that applies to the original creditor as well.  Can I dispute these entries on my credit report?  Sorry this is question is so long.  Thanks for the help.

Answer
Mery,

The situation you've described is a bit of a moving target.

The charge-off by the original creditor is an historic fact, one that is reflected in your credit reports.  The payment to the buyer of your debt is more recent, and stands on its own.

Though you did not specify this information, the amount you paid to the buyer of the account, in settlement of the debt, may have been less than the original debt.  (Certainly the buyer of the obligation paid less than 100% of face value to the original creditor).

In any case, I would suggest that you take advantage of your right to submit a written statement to each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) for inclusion in your file.  You may send up to 100 words, and they are required to include it your written statement to anyone who requests your credit report.

Once a potential creditor understands it's the same debt, that should help them in making a determination on extending new credit to you.

I hope that helps.

BTW, I was away all day, and just received your question, so this is the first chance I've had to respond.

Good luck!