Important info on 7-year clock

Discussion in 'Credit Talk' started by Mo, May 10, 2000.

  1. Mo

    Mo Guest

    Thanks to Carreon & Ass. (Kristy??), I checked out the FTC site with opinion letters on issues importatn to people here. Below is a link to an FTC opinion that will really help those who have asked questions about:

    (1) What about clock re-sets if you make a payment on a charge off
    (2) Can a charge-off occur even years after the original delinquency

    Essentially there is a key date, December 29, 1997 that governs how these things can be reported. Read the opinion, but here's an example:

    An account goes delinquent in June 1994. The creditor could have charged if off PRIOR to the magic date (12/29/97), let's say June of 1997. In that case, the ding could legally stay on your report for 7 years from 6/97, until 6/04.

    BUT....if the creditor had reported the same account in January of 1998, THEN the 7 year clock starts back at the date of original delinquency. Thus it falls off 7 years from June of 1994, or in June of 01. Makes a big difference.

    So, for those who have the concern about charge offs falling off, finding out the key date of when the charge off was actually first reported is critical. But, I have read that the CRA's actually try to accommodate all such issues under the NEW tenets of the FCRA, regardless of the dates originally reported.

    The amendment to the FCRA that went into effect on the magic date was to correct some holes in the orignial FCRA. This was apparently one of the more important ones. Have a look at these letters that Carreon & Associates pointed us to. Some really helpful stuff in there.

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