what exactly is first delinquency..

As far as I know it is based on the LAST PAYMENT YOU MADE.

 

"Section 623(a)(5) of the FCRA concerns the duty of furnishers to provide a notice of the delinquency date of accounts to consumer reporting agencies. This section provides that persons who furnish "information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall . . . notify the agency of the month and year of the commencement of the delinquency that immediately preceded the action." The provision is clear that furnishers must provide to consumer reporting agencies the month and year of the commencement of the delinquency that immediately preceded placement for collection, charge to profit and loss, or similar action. Thus, under the plain language of the statute there is no allowance for the use of an alternate, later date; you must use the statutory date for reporting. Use of the "paid-to-date" as that term is used in your accounting system is not acceptable.(1)

The legislative history indicates that Congress included the requirement of Section 623(a)(5) so that there would be a uniform date certain by which all consumer reporting agencies would compute the seven-year reporting period for adverse items of information. It was the intent that the seven year reporting period begin with the commencement of the delinquency rather than any other date.(2)"

Here's the full opinion letter http://www.ftc.gov/os/statutes/fcra/harvey.htm

 

This FTC staff opinion letter answers your question.

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Division of Credit Practices
Bureau of Consumer Protection
~
Clarke W. Brinckerhoff
Attorney
-
(202) 326-3224


August 31, 1998

Mr. Clifford A. Johnson
1917 Surrey Trail
Bellbrook, Ohio 45305

Re: FCRA §§ 605(c) and 623(a)(5) - "Commencement of the delinquency"

Dear Mr. Johnson:

This responds to your request for our views concerning the calculation of the period for which a consumer reporting agency ("CRA") is permitted to report accounts that have been charged off, placed for collection, or subject to similar action, under the amended Fair Credit Reporting Act ("FCRA"). You report that the following series of events occurred with respect to one of your credit accounts:

"My last payment was received by the creditor 12/96. My payments were due monthly and I missed the 1/97 payment and all subsequent payments culminating in a charge off. This creditor does not report to the credit bureau until the account is 90 days delinquent. . . . The creditor contends that the delinquency did not occur until 3/97 because that is when they first reported it."

Section 623(a)(5) requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605(a)(4) provides that the credit bureau may report the chargeoff for seven years. Section 605(c)(1) provides that seven year period begins 180 days from that date. In the scenario your reported, it is our view that the delinquency that led to the charge-off "commenced" in January 1997, the month the first payment was missed. Thus, that is the month and year that the creditor must report to the CRA, and that the CRA must use to calculate the time period dictated by Section 605.

We are not in accord with the contention that the date "when (the creditor) first reported" the chargeoff to the CRA constituted the start of the delinquency. Sections 605(c)(1) and 623(a)(5) were recently added to the FCRA to correct the ineffectiveness of the previous FCRA, under which the date that started the seven-year period was uncertain or under the control of the creditor.(1) The legislative history of these provisions makes it clear that they were designed to correct the often lengthy extension of the period that resulted from delayed creditor action:

Current law generally prohibits consumer reporting agencies from including in a consumer report accounts placed for collection or charged to profit and loss which antedate the report by more than seven years. The Committee is concerned that this seven year limitation is ineffective. In some cases, the ... action occurs months or even years after the commencement of the preceding delinquency. ... Consequently, the consumer report may contain such information even if the delinquency commences more than seven years before the date on which the report is provided to a user.

The Committee bill specifies that the seven-year period with respect to information concerning a delinquent account charged to profit and loss . . . may begin no more than 180 days after the commencement of the delinquency immediately preceding the ... action.

S. Rept. 104-185, 104th Cong., 1st Sess. 39-40 (emphasis added).

Thus, Congress intended to establish a date certain -- the start of the delinquency -- to begin the obsolescence period (now seven years, plus 180 days).(2) The alternate view stated to you (that the date of reporting controls) is at variance with both the plain language of these amendments, and the intent of Congress in enacting them.

In sum, we believe that the phrase "commencement of the delinquency that led to the action" in Sections 605(c)(1) and 623(a)(5) of the FCRA should be construed according to its normal meaning. If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent.

The opinions set forth in this informal staff letter are not binding on the Commission.

Sincerely yours,

Clarke W. Brinckerhoff

 

thank you, LKH, please accept my apologies for adding an opinion letter that only confused the question.