Post Number: 225
|Posted on Monday, September 23, 2002 - 08:03 pm: ||
"6. Reporting Delinquencies -- Section 623(a)(5).
If you report information about a delinquent account that's placed for collection, charged to profit or loss, or subject to any similar action, you must, within 90 days after you report the information, notify the CRA of the month and the year of the commencement of the delinquency that immediately preceded your action. This will ensure that CRAs use the correct date when computing how long derogatory information can be kept in a consumer's file.
How do you report accounts that you have charged off or placed for collection? For example:
A consumer becomes delinquent on March 15, 1998. The creditor places the account for collection on October 1, 1998.
In this case, the delinquency began on March 15, 1998. The date that the creditor places the account for collection has no significance for calculating how long the account can stay on the consumer's credit report. In this case, the date that must be reported to CRAs within 90 days after you first report the collection action is "March 1998."
A consumer falls behind on monthly payments in January 1998, brings the account current in June 1998, pays on time and in full every month through October 1998, and thereafter makes no payments. The creditor charges off the account in December 1999.
In this case, the most recent delinquency began when the consumer failed to make the payment due in November 1998. The earlier delinquency is irrelevant. The creditor must report the November 1998 date within 90 days of reporting the charge-off. For example, if the creditor charges off the account in December 1999, and reports this charge-off on December 31, 1999, the creditor must provide the month and year of the delinquency (i.e., "November 1998") within 90 days of December 31, 1999.
A consumer's account becomes delinquent on December 15, 1997. The account is first placed for collection on April 1, 1998. Collection is not successful. The merchant places the account with a second collection agency on June 1, 2003.
The date of the delinquency for reporting purposes is "December 1997." Repeatedly placing an account for collection does not change the date that the delinquency began.
A consumer's credit account becomes delinquent on April 15, 1998. The consumer makes partial payments for the next five months but never brings the account current. The merchant places the account for collection in May of 1999.
Since the account was never brought current during the period that partial payments were made, the delinquency that immediately preceded the collection commenced in April 1998 when the consumer first became delinquent."