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Binggg

Credit Union transitioned CC into loan

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So my wife has a Dallas credit union credit card.  They have been in the process of either being bought or just combining with Neighborhood CU.  In Aug and Sept my wife didn't make payments on her card.  In October a new entry hit her CR for a Dallas CU loan.  In October her CC was marked as 60days late and the loan which had a balance for what the CC balance was also had a 60 day late for it's first reporting.  We paid in November but it went towards the CC because we didn't even know about the loan and nobody said anything when we went to the CU around the corner to pay.  Now I know they can't post that both the CC and loan were late in October because it's all about the same amount but my question is can they transition the CC to a loan and immediately mark the loan as late?  Also, can they put a loan in my wife's name to pay off the CC without her knowing?  My major complaint is that we screwed up but instead of being punished by having 1 account with late payments, we now have two accounts with lates for the same thing. 

 

There were some fishy things that went on while the two CU were combining.  We had three months right before that were our amount due for the month was zero.  We were on time but had a balance so there was no reason for it.  And usually we get a call if she's late at all and this time we got no calls and no letters.  It's still our fault but something weird was going on. 

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is the new loan merely a credit card account for the "new" CU or is it a new installment account? if the latter, what paperwork did you receive for the new loan?

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It's an installment account.  They took the balance from the CC and made it a 48 month loan.  I didn't even know about it until I got the payment booklet, which was in November.

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Was this a secured card?

 

Have you read every word of both the CU membership agreement and the credit card agreement?

 

Do you have, or have you ever had, an installment loan of any kind with this CU?  CUs do funky like cross-collateralization.  

 

While I have never heard of this specific outcome, it's possible that it's all spelled out in the agreement(s). 

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No it wasn't a secured card.  Yes, we had an auto loan thru them but it was paid off a few years ago.  I have no problem with them moving this to a loan.  It will workout better for us but it hurts that right off the bat the first reporting of the loan is a 90 day late. It seems like if they moved the balance over to a new loan it wouldn't start out by being late.   Maybe I'm wrong.

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Why were there no payments made during August and September?  The transition in ownership does not change the reality that monies were apparently still due on the account...and if funds were due but not paid, then the account was, in fact, late.

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1 hour ago, centex said:

Why were there no payments made during August and September? 

This isn't an excuse but my sister had just moved here from South Carolina so we could take care of her and she ended up committing suicide. Again, the account should have been paid but I honestly was in a fog for several months.

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My personal recommendation is to not focus on the somewhat unusual aspects of this situation (loan conversion, credit reporting, etc).  Since, bottom line, you don't have qualms with the loan liability, strive to get someone at the CU to agree to change the adverse reporting month entries to a "not reported" status.

 

I recommend calling the CU and asking to speak to the lead loan officer.  Explain that you very much regret the delinquencies.  Note that there were extenuating circumstances involved that you'd like them to consider and review whether the delinquent reporting can be cleared.  Be succinct in your explanation and offer to follow with appropriate documentation, if it would be helpful in their consideration.

 

If the loan officer explains that they're required by contract to report accurately, say that you grasp this and aren't requesting they they reflect a "current" status for the months of question.  Explain that your understanding is that while anything reported must be an accurate reflection of payment performance on the account, there isn't a requirement to report.  A status of "not reported" is consistent with the requirement to report accurately.

 

If they argue the above reasoning, I wouldn't argue back.  Simply acknowledge what he's said and enlist his assistance in effecting any change to the reporting that would lessen the impact of the negative entries.

 

Oh ... obviously you want to clarify that you're hoping for changes to the delinquencies reflected on both the revolving and installment tradelines.

 

I wish you the very best luck with this.  Creditors are notoriously resistant to removal of adverse information these days.  However, if you're reach out sincerely and honestly, hopefully you'll receive a bit of empathy in return and an earnest desire to do what they can.

Edited by hdporter

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