Consumer complaint received 2015-10-17
Company: DISCOVER BANK
State: IL
Product: Student loan
Sub-product: Non-federal student loan
Issue: Dealing with my lender or servicer
Sub-issue: Trouble with how payments are handled

Complaint:
In continuation of case XXXX [ remove before publishing ] : Discover Student Loans is continuing to report each scheduled and agreed-to auto-draft payment I make to them as a " missed payment '' to the credit bureaus. This dramatically damages me as a consumer since my credit scores are significantly impacted by " percentage of on time payments '' in my credit history. Discover Student Loan 's " missed payments '' appear as the sole negative activities on my credit history since my bankruptcy was discharged, and represent to inquirers proof that whatever money management issues they speculate me to have had before the bankruptcy, continue into the present day. 

This is factually false as a " missed payment '' is defined as a payment that was never made by the consumer despite an agreement between the parties to make it. It is also damaging that each payment I make on time actually hurts my credit history more. This is the first problem. 

Discover defends this reporting on the technicality that because I declared bankruptcy while the loans were with XXXX, the loans automatically enter " charge-off '' status under XXXX before they were sold to Discover, and that each payment is then considered simply a reduction in the delinquent amount, regardless if the account had ever been delinquent or not. 

The loans are already reported as " charge-off '' by XXXX however. This means that each of these loans is reported on my credit twice as charged off, damaging my score twice for only XXXX charge-off account as if XXXX account was charged off by XXXX and another by Discover student loans. This is the second problem. 

Ever since Discover acquired the loans however, I have made each payment " as agreed '' by its very definition- payment arrangements were made between myself and Discover upon acquisition, successfully drafted each month, and the agreements were renewed annually. Therefore, the accounts with Discover should show as " Paid as Agreed '' and the accounts should only show as " charged off '' by XXXX who were the only lenders to charge the debts off. 

Just today I made ahead-of-schedule arrangements to pay off the remaining balances in full, and the final payment to XXXX account. However I was told that even these ahead-of-schedule payments to pay off the accounts in full will only add to the number of so-called " missed payments '' on my credit report. While eliminating delinquent debt which reflects well on me to one who reviews my history closely, my face-value credit score will actually suffer a worse punishment for these early payments by adding to the number and increasing the percentage of so-called " missed '' or " late payments '' even though they are pre-paying the debt to XXXX the balance completely. 

Furthermore, these credit agencies show that the charge-off date is updated each month by Discover student loans to be the last date of update. This then shows that each month the loans are charged off not just through the updated " charge-off '' date, but also through an illustration of monthly payment history which lists each month as the account being " charged off. '' This is the third problem. 

My only request is that these payments to Discover student loans and the accounts they hold are reported by them factually correct. That means that the payments which were all made as scheduled without error be labeled as " on-time '' and that the accounts are marked as " Paid as agreed '' until the final payments I arranged today are processed. At that time the accounts should be labeled as " PAID IN FULL '' and every payment preceding them should be shown as " on time. " Industry labeling practice technicalities are no excuse for factual misrepresentations of myself, my payments, my financial agreements, and my ability to keep those agreements. Such misrepresentations damage me significantly.

Company response to consumer: Closed with explanation