If we charge off a loan and are later able to enter into a stipulation agreement how do we reflect this accurately on the Borrower's credit report? The charge-off occurred and is part of the credit history but they're paying as agreed according to the terms of the new stipulation agreement... upon entering into the stipulation agreement do we create a new loan/tradeline to reflect the stipulation amount/terms, etc. and the declining a balance while the original tradeline reflects the charge-off information?

Or do you update the original tradeline to match the terms of the stipulation agreement, changing the status code to match the new current status and reflect the declining balance? this seems like it wouldn't completely be accurate since it was charged-off. Would the CRAs flag it as an error to report a tradeline as charged off one month and then with a status code of current the following month?

Define "stipulation agreement"?

Our legal department will create a new agreement with the Borrower where they are making payments on the charged-off debt, at a new interest rate or payment amount from the original agreement.

If you are not actually booking it as a new loan, then you would not report it and would update the charge-off record if they paid it off. You could not book it as a new loan unless the customer passed normal underwriting criteria. Sounds like it would need full Reg. Z disclosures however.

How should charged off accounts be reported?

Answer: Report the following Base Segment fields:
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Scheduled Monthly Payment Amount = zero
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Account Status = 97 (Unpaid balance reported as a loss – charge-off)
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Current Balance and Amount Past Due = outstanding balance amount,
which may include fees and interest. If payments are made by the
consumer, report the declining balance in these two fields.
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Original Charge-off Amount = the original amount charged to loss,
regardless of the declining balance. This field should not be changed.
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FCRA Compliance/Date of First Delinquency = the date of the first 30-day
delinquency that led to the account being charged off
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Date Closed = For Installment and Mortgage accounts (Portfolio Types I
and M), zero fill. For Revolving, Open and Line of Credit accounts (Portfolio
Types R, O and C), if the account is closed, report the date the account was
closed to further purchases. Otherwise, zero fill.
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Date of Last Payment = date the most recent payment was received