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What should I do if my debt’s date of first delinquency is incorrectly reported?

The date of first delinquency starts the clock ticking on some important legal time limits for the debt

Summary

If your credit report has inaccuracies, you should dispute the matter with the credit reporting agency or the furnisher of the information.

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If you have fallen behind on your card payment, there will certainly be negative consequences for you.

You would be besmirching your credit report, for one. But how long do these consequences last? For credit reporting purposes, the negative input will be reported for up to seven years.

When does this seven-year period start, you ask? A date called the date of first delinquency is key to this process. Sometimes, those that furnish the information about your debt could be inaccurately reporting this date. Considering that it has consequences for your credit report, you should know what to do if your debt’s date of first delinquency is incorrectly reported.

Check out all the answers from our credit card experts.

Ask Poonkulali a question.

What is a debt’s date of first delinquency?

The Fair Credit Reporting Act defines the date of first delinquency as the date at which you first became late and then never brought the account current before the creditor decides to charge it off or send it to collections. Businesses typically send an account to collections or charge it off six months after the delinquency commences.

Your credit report could contain negative information about any delinquent debt for up to seven years after it became delinquent, or up to seven years after the charge off occurred or the debt was sent to collections, which is seven-and-a-half years after the date of first delinquency. The law prevents credit reports from furnishing information about this delinquent debt beyond that time, so it should fall off your credit report once this timeframe is reached.

Another reason a debt’s date of first delinquency is important to know is that there is a statute of limitations for credit card debt beyond which a debt collector is not legally permitted to sue you for the debt. This statutory timeframe varies by state, but the clock starts ticking generally from your date of first delinquency. It could even begin six months after that time, when the creditor sends your debt to collections.

See related: Credit card delinquency statistics

There are penalties for incorrect delinquency reporting  

The FCRA requires that those furnishing information to credit reporting agencies (CRAs) provide information that is accurate and complete. Furnishers also should prevent re-aging of debt, whereby they report the date of first delinquency as a later date than it actually is.

They should be particularly careful in circumstances involving mergers, when a portfolio is acquired or sold, or in other situations where debt is transferred. The Federal Trade Commission, the Consumer Financial Protection Bureau and banking agencies also have rules for so-called furnishers.

If any agency that furnishes information to credit reporting bureaus provides inaccurate information on your date of first delinquency, it could face monetary penalties. For instance, the CFPB recently entered into a settlement with a debt collector, Afni, whereby the collector agreed to take some steps to prevent future lapses, and also was assessed a $500,000 civil money penalty.

According to the consumer protection agency, the debt collector “furnished information to CRAs that it knew or had reasonable cause to believe was inaccurate and failed to report to CRAs an appropriate date of first delinquency on certain accounts.”

The FCRA requires that a lender that refers an account for collection and notifies a credit reporting agency about this should report the debt’s date of first delinquency to the agency within 90 days. This“date of delinquency is the month and year the consumer’s delinquency resulting in the referral began.”

In the case of debt collectors reporting about a creditor’s debt to a credit reporting agency, they should report the date of delinquency that the creditor gave them.

If a creditor does not provide this information to the debt collector, they can “establish and follow reasonable procedures to determine the date from the original creditor or another reliable source.” If the debt collector still cannot find the date of first delinquency, it should have procedures set up to make sure that it settles on a date that is before the account’s charge-off or referral for collection.

See related: What to do if your credit card is closed due to delinquency

Dispute inaccurate delinquency reporting

If a furnisher has inaccurately reported your date of first delinquency to a credit reporting agency, you could put in a dispute either with the former or the latter. You should provide a copy of your credit report, which you can get for free once a year from Equifax, TransUnion and Experian (and once a week for free through April 2021), along with a statement of the issue and any documentation to back your allegation.

If you dispute the information with a credit reporting agency, it should resolve the issue within 30 days after your complaint. And if you provide any additional information during this investigation process, the agency has an additional 15 days to resolve the matter. (During the COVID pandemic, the CFPB is granting credit reporting agencies more time to resolve consumer issues, so there could be delays beyond this timeframe.)

If you file a complaint with the furnisher, it should conduct an investigation and also typically resolve your issue within 30 days. It should also notify credit reporting agencies to which it provided your information about any inaccuracies that it found.

Contact me at pthangavelu@redventures.com with your credit card-related questions.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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