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Amex CO

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bkaa
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Subject: Amex CO

Tue Oct 23, 2007 10:07 pm

I have had an Amex CO on my CR for 6 yrs, and is scheduled to fall off in 4/08. I received a letter from AMEX to pay off the balance and participate in their Optima program. Will this remove the CO from my CR?

Laura

Joined: 21 Jun 2007
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34596 Magic Points

Wed Oct 24, 2007 5:55 am

If you have a balance my advice would be to pay it off. Why keep a burden for so long? Paying off the account will help removing any negative comments on the CR.
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Laura.

CreditGrantor

Joined: 01 Sep 2007
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Sat Oct 27, 2007 11:18 pm

The problem is that the tradeline will not be removed from your credit altogther -- it would simply be updated as a "paid chargeoff." Doesn't look as bad as an unpaid chargeoff, but still a derogatory mark nonetheless.

You may be able to negotiate with Amex and get them to remove the tradeline as a condition to your making payment. I'm sure they would rather get paid and remove it now, then not get paid and have it fall off on its own within 6 months...

Laura

Joined: 21 Jun 2007
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Mon Oct 29, 2007 7:03 am

Credit Grantor,

In this case even if bko pays off the remark would remain derogatory? What about the optima program, why are they asking him to opt for it?
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Laura.

CreditGrantor

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Mon Oct 29, 2007 11:10 pm

Well, yes, unless he can negotiate for them to remove it. Without getting them to agree to delete the whole thing, it would just be updated as "paid" -- but won't erase the negative pay history or the fact that it was charged off prior to being paid.

I think this whole Optima program is a clever marketing ploy to get their old chargeoffs to pay. See, if his current account was charged off 6 years ago, then the SOL is probably passed and they would never really be able to collect it...

But if they can get him to pay off the chargeoff by offering a new card in exchange for payment, in essence they are just turning old debt into new debt. If he defaults on the new account, then they would be able to file suit that is not past SOL.

Just my theory...

Laura

Joined: 21 Jun 2007
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Tue Oct 30, 2007 5:59 am

Oh my God. This is dangerous. Do they really plan things this way? In that case we always have to think before any offer comes our way. It might be a trap.
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Laura.

Morningstar

Joined: 17 Apr 2007
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Tue Oct 30, 2007 6:30 am

Amex has a long memory. To my knowledge, if you owe them, default, file BK later, they will not do business with you again.
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Laura

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Tue Oct 30, 2007 9:07 am

In that case why are they asking Bkaa to opt for the optima program?
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Laura.

Morningstar

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Tue Oct 30, 2007 11:26 am

I don't think OP filed BK. The debt is just old, possibly past SOL.
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sdchargers_63

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Subject: credit report

Tue Oct 30, 2007 11:39 am

Do ALL 'negative' items stay on your credit for 7 years , or does it depend on what state you may live in?

sdchargers_63

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Subject: credit report

Tue Oct 30, 2007 11:41 am

or............( possible?) does it depend on where the LOAN 'originated' from?

Morningstar

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Tue Oct 30, 2007 10:37 pm

Length of time on CR is determined by what type of negative entry it is:

BK: 7-10 Years
Judgments: Lifetime of judgment, including renewals
Tax Liens: 15 Years
Lates/Charge offs: 7 Years from date of either last late payment, or date of charge off; whichever is later

My problem is that the loan was ~30% interest, from a [essentially] predatory lender (Beneficial, a division of HSBC).

Best way I can explain it in other words: sdchargers, has a CashCall loan. Even if she never missed a payment, and paid it off, the loan will be on credit report as a good account. As far as her credit score goes, the CashCall loan would hurt, because people who are higher credit risks generally take out such a loan.
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Laura

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Thu Nov 01, 2007 5:30 am

So score also depends on the type of credit/loan that is being used?
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Laura.

Morningstar

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Thu Nov 01, 2007 5:50 am

If it can be interpreted as a sign of credit problems, then it likely will be. If I'm not mistaken, repeated balance transfers will also drop your score.[/b]
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CreditGrantor

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Sat Nov 03, 2007 1:21 am

I beg to differ. Credit bureaus do classify trades into various groups (ie finance companies, credit cards, banks, utilities, etc.) And I'm sure the scores probably look at your trade activity within those groups.

But they are such broad categories, and I do not believe scores get specific to an individual company like Cash Call or Beneficial. For example, when I signed a membership agreement with Transunion and Experian for my company, they assigned us a subcode and placed us in the "Finance Company" category. But TU and TRW don't know whether I'm charging 5% or 500% -- they don't know what types of customers I deal with.

For the bureaus/Fair Isaacs to start making subjective judgment calls on the type of business activity a furnisher engages is is "non-empirical" - which contradicts the "empirical" definition of a credit score.

I really do believe Cash Call and Beneficial are given the same weight as all the other finance companies in the same category. To my knowledge, they don't have a sub-prime category that they can place a finance company into.

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