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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 118758
Experience:  Attorney experienced in commercial litigation.
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I have fair credit with two scores around 620 and the other

Customer Question

I have fair credit with two scores around 620 and the other about 550. I am trying to purchase a home. The problem is that I have two judgments and was told that I have to pay them off prior to closing. Last year in Jan my truck was repossessed and I paid the money that I needed to get it back. Since then I have been paying it every month. My problem is that it is now on my credit report as a charge off but i have been paying the same amount every month to Santander who I obtained the loan from in the first place. I need to know if this is legal, and is there a way that I can get this taken off of my credit report. Is it true that they list loans as charge offs because they consider this a bad debt and will not be able to recover. Do they receive tax credits for this? I need a document from them sent to the mortgage company stating that this was listed on my
credit report in error. Is there anything that I can do about this legally, or am I in a big mess. Thanks, Cassandra xxxxxx
Submitted: 2 years ago.
Category: Consumer Protection Law
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Generally, if you get a letter from the bank that you are paying off the truck loan and have an agreement with them and are on time, that will satisfy the underwriter on that loan. If they did write off the debt, there is no way the bank can remove it even if you are paying on it. You can ask the bank if they will modify your credit report to indicate the loan is being paid on and is current, but that is at their discretion if they did charge off the loan. Typically, the most they will do is give you a letter stating that you are paying on the debt and are current for you to give to the loan underwriters.
Customer: replied 2 years ago.
They never sold the loan because I am paying the same amount that I started paying since the beginning of the loan. They have never discussed the loan being charged off. I saw it on my credit report. That is why I was asking if it is legal to list it as a charge off. You did not answer my question about it giving them a tax credit to say it is a charge off. I need to know what options that I have legally. So they can just do what they want to do? They don't have to answer to anyone?
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your reply.
They did not need to sell it to report it as charged off. All charged off means is they have taken it off of their books and they have the right to do so at their discretion and you can still be held liable for a charged off loan. Just because a creditor charges it off does not mean that creditor cannot still collect the debt from you as they are doing.
I told you the recourse above I am afraid. That is the only legal recourse you have here in this matter. The problem is you were delinquent, they repossessed, they agreed to terms with you and charged off the loan subsequent to that but agreed to allow you to get the truck back and they are accepting payments, that is their discretion as a deal they can make with a delinquent debtor as this is a contract issue with them.