How to Rebuild a Bad Credit Rating, Part Five
Collection or Profit-and-Loss Accounts added to your credit report after December 29, 1997, can be reported for seven and a half years from the original date of delinquencynor from the date they were charged off or placed for collection. For example, suppose you missed a payment that was due in January 2004. You didn’t make any payments for five months and your account was charged off in May 2004. The charge-off listing could then remain on your report until the end of June 2011seven and a half years after you missed that first January payment that led to the charge-off.
Now let’s say your account was turned over to a collection agency in December 2007. That collection account (and all subsequent collection accounts for that same debt) can be reported until the same date as the charge-off (seven and a half years from that first missed payment): June 2014.
Collection agencies sometimes tell consumers they have ways to report an account forever till they pay. They may have their tactics, but that statementand falsifying information to carry it outis not true and is also illegal. The Fair Credit Reporting Act requires collection agencies to provide credit reporting agencies with the original date of delinquency for tracking purposes.
Having said that, those requirements only apply to accounts added to your report after December 29, 1997. For any accounts added before that time, it is a little more complicated. Under the old law, collection accounts were often reported for seven years from the date they were placed for collection. Each time a collection account was passed on to a new agency, a new seven-year period was started. The law was revised to end that problem but many people still have older charge-off and collection accounts on their reports.
The good news is that if you can prove that original date of delinquency, the credit reporting agencies will honor the newer seven-and-a-half-year rule. But the challenge is to find something to prove it! An old credit report showing the original information, an old collection notice, or even copies of your statements from that time period can work. Even if you don’t have that documentation, try disputing it and state that the information is outdated. It might work.
