Amex CO

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.

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...

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?

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...

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.

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

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

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

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

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

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.

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

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]

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.

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

That is probably true for almost any company. My computer records go back to the 80s when our company first opened, and we can still look up our very first account .... When we get a credit app, if the SSN we are entering is already on file, then our system will pop up a window with all previous accounts/status that person has had with us. If someone has ever filed bankruptcy on us or their previous account was a chargeoff, we will not even consider their application unless they pay their old account off.

This should anyway be the policy as far as business is concerned. Unless you are off the debt that you owe its not feasible to ask for credit the same company. The history of your payment shows your capability to pay back. A good record will allow to proceed further but a negative will anyway stop you unless you work on dropping the negative from your record.