Moderate Risk Public Trust w/Old Unpaid Charge Off

SECURITY CLEARANCE Q&A
1

I will be having to go through MRPT Suitability for a permanent full-time law enforcement position. I have good unbroken employment history, no drug history, no criminal history, no traffic citations, only moved once within the residential scope and have excellent personal/employment references.

But… I have one old unpaid CC charge off of approximately $4k that has since fallen off my entire credit report earlier this year. Aside from that, I have no collections and my FICO (actual FICO) is a little over 680. I have a total credit limit of approximately $34k with under 1% utilization.

I am disclosing the charge off even though it is not on my credit report. What are the chances of me being denied a MRPT based off of this information? From everything I read here about finances, this one charge off makes me a little nervous. Or am I overreacting?

2

One thing to highlight… and I learned about it here on this forum… I am not sure of the exact details but in some cases, a “charge off” or forgiven debt is considered income and the creditor will send out a 1099 of some kind. So they may want to see that you included this on your taxes that year.

3

Oh I didn’t even think of that. Though, I have not received a 1099 from the creditor, not that I can recall. So with an old unpaid charge off thats not on a credit report and no 1099 from the creditor, are my denial chances pretty high for a MRPT?

4

A charge off is not the same as forgiven debt and is not considered income. A charge off means that the creditor is no longer attempting to collect on the debt but that it IS STILL OWED. Forgiven debt is debt satisfied for less than a full repayment. This will almost always involve a 1099-C and can have tax consequences but there is nothing else owed on the debt.

1 Like
5

Topic of discussion: https://news.clearancejobs.com/2016/03/20/what-information-on-credit-reports-is-critical-to-clearance-adjudicators/

6

And here: https://www.clearancejobsblog.com/truths-and-myths-on-credit-reports-for-background-investigations/

7

I read the articles you attached. I gathered from this that there is a high probability of me being denied MRPT Suitability?

8

One charge off will not impact suitability if there is no previous or current pattern of financial irresponsibility.

9

I have seen a TS SCI held up for months based on a charge off from years prior that no longer showed on the credit report. How can a person know there is a debt or charge off if it is no longer showing on the three credit bureaus? Particularly if the FICO is a rock solid 800? I can tell you the government gets a deeper view than the consumer of their own credit. And it isn;t so much the debt, it is the decision making leading to not paying debt. Circumstances matter.

10

Would the charge off being unpaid be considered a CURRENT pattern since the debt is still owed?

11

Well . . . The charge off was on their credit report for seven years or so before it dropped off . . .

Most people know that there are charge offs on their report they just don’t know what they means.

1 Like
12

True. Even when they say “But I have a 750 excellent credit…” they don’t realize they have a 750 at this moment, but the repayment history prior could have been abysmal. And as we know it is the decision making process, living up to agreements, etc that is far more important than a FICO. Which really isn’t used at all, but normally tells a good story.