So I applied for a mortgage thinking my credit would be fine, since I and my husband always pay their bills on time. When I last checked my husband's credit report 6 months ago, his credit score was in the low 700s. 2 days ago, after applying for the mortgage, I got a call saying we were denied the loan because of 'recent, frequent delinquencies.' I headed to myfico.com and found his score was in the 540s! So here's what happened:I didn't grasp the 'send on' and 'deliver by' concept of BoA online bill pay. My Sears charge is due on the 4th of the month. For the last 4 months, I have sent the payment on the 3rd of the month, so it seems the payment wasn't applied until the 6th. In each month that my payment was applied TWO days after the due date, Sears reported me as 30 days delinquent to the CRBs... hence the low score. I thought that a person had to be 30 days delinquent to be reported, so I called Sears to clear it up. I talked to 4 different people, all of whom informed her that Sears has a 'Zero Cushion Policy' and reports delinquencies that are even one day past due. I am not sure if waiting 30 days is required or just a courtesy extended by EVERY other company out there. Now I will also have to check to see if my universal default clauses may have been triggered on other cards as a result of this. I thought I would post this as a warning to anyone else out there who may eventually find themselves in a similar situation! Has anyone else ever heard of a company doing this? Does anyone know if it's even legal? Thanks!
Is this what you were told by Sears, or is this Citi handling Sears CC accounts? The CRA credit reports only show lates as "30 days late". They do NOT show "1 day late", or "2 days late", etc. If Sears is posting payment information that shows on your reports as "30 days late", and it is not actually 30 days late, then it is erroneous. It is NOT common practice for other creditors to report as 30 days late for a few days late. (You might even want to ask your banker to confirm this.) Dispute thru the CRA, specifically as not 30 days late, in writing, CRRR. Also send a complaint to your state AG. Note that you were told by several CSRs that their policy was to report even 1 day late as 30 days late. As a "courtesy", send a copy of your AG complaint to Sears executive offices, again CRRR. Indicate in your letter to their executive offices that this is a dispute, under FACTA, of their erroneous reporting. As you have seen, there is a big difference between reporting no lates, vs. reporting many 30 day lates. Low 700s is prime credit territory, while low 500s is barely lendable. The distortion in your credit picture, and the likely effect on your other credit relationships the longer this persists, is likely to be severe. This is deliberate reporting of erroneous negative information, and also gives Sears an unfair advantage in lending to you at higher rates than they might otherwise, knowing that your reports are showing erroneous negative information that does not accurately reflect your actual credit risk. There is no reason to accept or tolerate it. This is NOT about a "cushion"! They get paid their interest, and even late fees, in accordance with their contract with you. This is about "reporting", which if done, can only be done "accurately" in accordance with law. Neither you, or they, can waive compliance with law. Note that accurate reporting is a separate issue from whether they can charge you a "late fee" for even one day after the due date, or whether they choose to raise your rates themselves should you be repeatedly late. In fact, they could close your account, raise your rates, reduce your credit line, or other similar actions, based on your contract. What they can't legally do is deliberately report inaccurately. Credit reporting is governed by federal law under FCRA. They are required by federal law to report "accurately", and they don't get to redefine 1 day as 30 days without being "inaccurate". Their CSRs need to be "re-educated".
Actually, with your mortgage declined, you have actual damages, and their actions are apparently willfull. You might also want to run this by an attorney familiar with FCRA law.
Did Sears clearly define, in writing, when online payments would be applied? Some companies state 24 hours. Double-check.
Here is an article that claims there is nothing wrong with reporting "30 days late", when it is only 1 day late. Note the veiled implication that there is something wrong with creditors who don't report trumped up lates. Also notice that it specifically mentions Sears as one creditor that systematically does this: http://www.atvantagegroup.com/mortgage/credit_reptypes.asp If creditors want to report an account as "2 days late", they should do so. If the system doesn't have a mechanism for publishing that an account is 2 days late, it is because it is not significant in deciding whether a consumer is creditworthy. In fact, common sense says it probably reflects more accurately on the reliability of mail delivery. "30 days late" when it is only 2 days late is deceptive on its face. A couple years ago, Citi got nailed for claiming payments were late when received on the due date, but after some undisclosed cut-off time. What might have been OK in the good-ol-boy days of secret credit reports that consumers were not supposed to see, let alone understand, shouldn't go unchallenged today. Bankers know how to count days accurately. They do it every time they calculate interest. If you accept this, you will get screwed. If you push, and dispute in writing, they will likely cave, even if they say their actions are not illegal. This activity smells like a good opportunity for a class action, as no jury would buy this BS.
I sent out a dispute form with a copy of the credit report and my online bill pay history. It posts in my bill pay when the payments were actually recieved by Sears. The mortgage company says "You would be an excellent canidate for a mortgage IF you could get Sears to take these remarks off your credit report". So, looks like we won't be buying a house this year. (I hate renting!) I am just hoping something comes from filing the dispute. Thanks for your input - Deeda
If you paid the bill on the 3rd of the month, when does Sears show the payment was received? Received and "applied" are two different things. Double-check the online site for *any* statement about online billing paying such as the time-frame for when payment will be applied. In this situation, raise holy hell with Sears executive offices especially due to the fact you've suffered real and substantial damages due to their inaccurate reporting. It'd certainly be worth your time to contact an attorney versed in the FCRA and the www.naca.net site would be a good place to start to find one in your area.
Get your mortgage company to send you a letter to that effect. If necessary, send them a letter asking them what on your credit reports is affecting your ability to get a mortgage. Also, there is no reason you have to dispute thru one channel at a time. You can't know up front which dispute will get results. Delay in correcting an error costs you.
Credit terms such as interest rates, late fees, and such, are subject to the terms of the contract between the lender and borrower, subject to any limitations set by law, such as those under FCBA requiring timely billing, dispute resolution, etc. Credit reporting is governed by FCRA, and not just at the whim of company policy, nor is this consumer protection waivable by contract. In the absense of the FCRA protections that those who report to CRAs have, reporting of erroneous negative information would have exposed them to litigation under the common law concepts of defamation and libel. If they want to benefit from the protections provided by FCRA for reporters of credit information, they have to play by the rules, which include requirements to report accurately, investigate disputes, and correct erroneously reported information.
Is this a Sears charge card, or a Sears MasterCard? Is it actually being handled by CitiBank? If so, you might try the following: 1) Dispute, in writing, CRRR, thru the CRAs that are reporting 30 days late when it is actually only a couple days late. That establishes Sears/Citi's legal responsibility to correct and report accurately, whether they just verify or actually correct. If they verify, they are in effect saying "we intended this to be reported as 30 days late", with no quibbling about whether they were actually just reporting late, and the CRA changed it to 30 days late. 2) At the same time bring the matter to the attention of this gentleman, again, in writing, CRRR: Martin J. Wong, Chief Compliance Officer, Citigroup Inc. http://www.citigroup.com/citigroup/profiles/wong/index.htm "Martin J. Wong is Chief Compliance Officer for Citigroup Inc. He was appointed to this position in January 2005. He has the responsibility for compliance for all Citigroup businesses. " Try this address. It appears to be their corporate headquarters: Mr. Martin J. Wong Chief Compliance Officer Citigroup 399 Park Avenue New York, NY 10043 U.S.A. Make clear in your dispute that you have had several cases where payments to Sears/Citi arrived or were posted late by several days due to delays in electronic payments, that the result was that Sears/Citi is reporting multiple "30 days late" against your credit files, when NO 30 day lates actually occurred, that your attempts to resolve this with Sears/Citi CSRs have failed, and that they have all told you that it is Company Policy to report even 1 day late as "30 days late", in violation of the FCRA accurate reporting requirements. Indicate that these erroneously reported lates have tanked your FICO scores from 720 down to 540 (or whatever), and that according to your mortgage broker, they are causing you to be unable to get a mortage and buy a house. Ask that they remove these erroneously reported 30 day lates from your credit reports.
