7 Year Clock???

It usually starts the day of your last payment, though this is sometimes difficult to prove. Creditors sometimes go by your report which can report the last activity as the date you were charged off or some other date which they have pulled out of the air.

 

I am questioning this also. I thought I read here that as of 1997, a new law came about stating that the clock starts from the first date an account went delinquent. I am pretty certain about this, but when I was talking to equifax on the phone about my GMAC chargeoff, she was adamant that the last date of activity is where the 7 yrs starts. Hence, my car loan began in 1989, was charged off in 1995, and will be on my report until 2002, or 7 yrs from the last chargeoff, which is seen as the last date of activity.

 

bump

 

Nope! Her training was inadequate.

 

Interpret these for yourself. Later dates on the letters indicate clarifications of statements made in previous letters:


http://www.ftc.gov/os/statutes/fcra/johnson.htm
http://www.ftc.gov/os/statutes/fcra/kosmerl.htm
http://www.ftc.gov/os/statutes/fcra/amason.htm

 

EdG, is right. Thanks Breeze. In case you dont want to read all of that.......the official and correct answer is: the seven year clock starts from the first date the account became delinquent and never became current again. That eliminates reaging of accounts by you making payments. You first posters were incorrect...fortunately.

 

Don't want to read it?? But it's always good to know for yourself, huh?

 

breeze, people have read that before and still had questions. i thought i was being helpful.

 

I think you were. Didn't mean you weren't helpful. You are always helpful.

 

Is there a time limit here? I thought I read that this rule came into effect around 1997? I need to know because my charge off occurred in 1996, so I may be on the hook until 2002, according to the old rule of the clock starting from last date of activity.

If I take this up with the cra's, what can I reference as proof? I mean, is this stated somewhere.
Thanks so much for your help..

 

The seven years start 180 days after the delinquency of the account.

Example: Payment was due Jan 1 2001. Seven year clock starts July 1 2001.

Just add 181 days after the due date of the last missed payment.

 

That part I get, I was really wondering about when this change took effect. It wasnt always this way, at some point they could use the last date of activity as the starting point for the 7 yr clock. So, my 1995 chargeoff would come off in 2002.

But, the law changed, and from 1997 on, the first date of delinquency was when the 7 yr clock starting ticking. So, if I use the 1st date of delinquency, (1993) it would have come off in 2001.

It had a grandfathering effect, such that for debts originating from 1997 on, this calculation could be used, but if the debt originated prior to 1997, the old rule was used.

 

Thanks for correcting me, that explains why I thought my credit report was so screwy LOL

 

so if a debt goes delinquent in 93 but you pay it off in 99, the 7 years starts from 99?

 

Most creditors do not distinguish the new law from the old. Most creditors apply the new law to accounts which were delinquent prior to 1996. This has been debated and discussed repeated on this site for quite a while.

Kristi our 'former' resident credit expert told us that the FTC rep told her. I have not had a problem with creditors applying the new rule to my accounts which defaulted before 1996 when I made a payment after the change of the FCRA.

If you dont mention it to the creditor, I dont think you will have a problem w/ deletions from the creditor or the credit bureaus. I didnt.

Dont lose any sleep over this one guys.

However, I think that the 180 days really only applies to accounts which defaulted after the 1996 change. I wouldnt fight that issue to much b/c it might cause you trouble in the long run. I had that problem with Discover. My account became delinquent in 1991 and was never current again. They charged me off in 1994. I had to weight until 2001 to get it removed. So for accounts prior to 1996 7 years from the charge off date applies.

The purpose of the 1996 change was to eliminate reaging of an account if you pay the balance. So if you make a payment on a charged off account after 1996 you do not have to wait another 7 years from the date of your payment.

In addition, if you have an account which became delinquent in 1997, you only have to wait 7 years from the 180 days of delinquency.

 

Ah, thank you. I guess I am screwed then, GMAC verifies this thing every time, so I guess I have to wait till 11/02 for it to come off on its own. Rats.