As a credit repair professional I have found it necessary to stay abreast of all the current laws, and new developments in the credit repair industry. Most of credit repair law is fairly straight forward and understandable to the laymen – after all, the laws were created for the consumer who desires to address their own credit issues without having to pay anyone to do it for them. However, as with any law, interpretation can be affected by situation, context and new litigation. There are as many wrong answers out there on the Internet as there are people writing about credit repair, so be careful!
I am a member of several credit repair blogs where the members have the opportunity to write about their personal experiences dealing with their credit issues. In some cases you can learn a great deal about credit repair by reading about the real-life experiences of others who are trying to do the same thing you are doing. If you look long enough, sooner or later you will come across a person who happens to be writing about a situation very similar to your own. A word of warning though, don’t take it as “gospel” just because someone on a blog says something is true. Do your own research; check other blogs, access the Federal Trade Commission’s website, Google your question in as many ways as possible to find answers to your questions. There is nothing more valuable than doing your own due diligence.
This article addresses time limitations imposed by the Fair Credit Reporting Act (FCRA) related to charged-off accounts. What I mean here is how long a charge-off can remain on your credit file after it has been reported by an original creditor or a collection agency. There appears to be much confusion about this issue and I hope this article will clear up some of that confusion.
Section 605 (a) (4) of the FCRA clearly prohibits credit reporting agencies (CRA’s) from reporting charge-offs that are more than 7 years old. Here’s how the seven year period is calculated: Section 623 (a) (5) of the FCRA, which became law in 1997 requires a creditor that reports a charge-off to a CRA to notify the agency (within 90 days of reporting the account) of the month and year of the commencement of the delinquency that immediately proceeded the charge-off. Section 605 (c) (1) provides that the seven year period BEGINS 180 days from that date. For example, if you miss your monthly car payment (an Installment Account) and that missed payment leads to the account becoming delinquent, the credit grantor must within 90 days report the exact date when they considered the account delinquent to the CRA. The CRA must then record that date as the start of the 180 day period, after which the seven year time limit begins. Here’s an example of how the process works:
1. You miss your last car payment
2. Account goes into delinquent status
3. Credit grantor must report to the CRA month and year account was considered delinquent
4. 180 days after that month and year, seven year clock commences
Contrary to popular opinion, no subsequent event or change of circumstances can interrupt the clock once it commences, whether it be the resale of the account to a collection agency, or even subsequent payments made on the account by the consumer. Nothing can reset the seven year limitation once it has commenced.
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I am a member of several credit repair blogs where the members have the opportunity to write about their personal experiences dealing with their credit issues. In some cases you can learn a great deal about credit repair by reading about the real-life experiences of others who are trying to do the same thing you are doing. If you look long enough, sooner or later you will come across a person who happens to be writing about a situation very similar to your own. A word of warning though, don’t take it as “gospel” just because someone on a blog says something is true. Do your own research; check other blogs, access the Federal Trade Commission’s website, Google your question in as many ways as possible to find answers to your questions. There is nothing more valuable than doing your own due diligence.
This article addresses time limitations imposed by the Fair Credit Reporting Act (FCRA) related to charged-off accounts. What I mean here is how long a charge-off can remain on your credit file after it has been reported by an original creditor or a collection agency. There appears to be much confusion about this issue and I hope this article will clear up some of that confusion.
Section 605 (a) (4) of the FCRA clearly prohibits credit reporting agencies (CRA’s) from reporting charge-offs that are more than 7 years old. Here’s how the seven year period is calculated: Section 623 (a) (5) of the FCRA, which became law in 1997 requires a creditor that reports a charge-off to a CRA to notify the agency (within 90 days of reporting the account) of the month and year of the commencement of the delinquency that immediately proceeded the charge-off. Section 605 (c) (1) provides that the seven year period BEGINS 180 days from that date. For example, if you miss your monthly car payment (an Installment Account) and that missed payment leads to the account becoming delinquent, the credit grantor must within 90 days report the exact date when they considered the account delinquent to the CRA. The CRA must then record that date as the start of the 180 day period, after which the seven year time limit begins. Here’s an example of how the process works:
1. You miss your last car payment
2. Account goes into delinquent status
3. Credit grantor must report to the CRA month and year account was considered delinquent
4. 180 days after that month and year, seven year clock commences
Contrary to popular opinion, no subsequent event or change of circumstances can interrupt the clock once it commences, whether it be the resale of the account to a collection agency, or even subsequent payments made on the account by the consumer. Nothing can reset the seven year limitation once it has commenced.
Share |
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