Derogatory Credit Report

To my understanding, when an account is disputed with a credit bureau, the "checked" status means that the credit bureau has verified that the listing is accurate and that the account will not be removed from your credit report, unless you can provide further documentation that the account is invalid. The "x" in "x-checked" is a status coding letter. The "x" status means that the bureau has checked the validity of the listing with the reporting creditor in response to your dispute, while "checked" is a description of the activity.

If you disputed the item online, you may want to dispute it again, this time in writing. While the online dispute process is convenient, it tends to be less effective than disputing the account in writing with the bureaus, as recommended by the Federal Trade Commission. See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.

Hopefully, following up your previous dispute with a written dispute will lead to the account being removed from your report. Since you previously disputed the item, you will need to ask for a "reinvestigation," and explain why the account should be removed from your credit report. Be sure to include copies of any pertinent documentation, such as dispute letters sent to the creditor or copies of payments showing that the account was paid off.

Derogatory items on credit report

Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. This law is known as the Fair Credit Reporting Act (FCRA). Under FCRA §605 (a) and (b), an account in collection will appear on a consumer's credit report for 7.5 years. The clock starts approximately 180 days after the date of first delinquency on the account. To learn when an account will be removed by the credit reporting agencies (TransUnion, Equifax, and Experian and others), add 7.5 years to the date of first delinquency. Subsequent activity, such as resolving the debt, is irrelevant to the seven-year rule. However, if the debt is a tax lien, that can appear for seven years from the date of payment. A bankruptcy will appear for ten years from the date of the final order. Delinquent federal student loans can be reported indefinitely, i.e., for as long as they are delinquent.

Just because a debt is removed from a credit report does not mean the statute of limitations for receiving a judgment to collect the debt has passed. Federal credit report laws and a state statute of limitations laws are separate and independent from each other. The seven years starts running from the date of first delinquency, which generally means seven and a half years from the date of last payment. Review your credit report carefully to make sure that the dates of last payment being reported on these accounts are correct.

The law stating that derogatory items must be removed from credit reports after seven years is designed to help consumers recover from past credit mistakes and help them rebuild their credit rating. If you find charged-off accounts appearing on your credit report after seven years, you may want to dispute the incorrect listings with the credit bureaus.

Some creditors, especially debt purchasing firms, will report inaccurate charge-off dates to extend the amount of time an old account appears on your credit report. If you find any inaccurate information, you should dispute the credit report listing with the bureau in question. See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.

The seven-year rule only applies to derogatory items, not to accounts that you are keeping current, or which you closed in good standing. As long as an account is not considered derogatory, it can remain on your credit report indefinitely. In fact, even accounts that are no longer reporting to the credit bureaus may continue to appear on your report as long as the account is not a derogatory item. It is common to see positive items that are more than 20 years old appearing on a credit report.

Bills.com offers a wealth of information about credit reports and credit scoring. I invite you to explore the site, starting with the Credit Solutions and Resources page.

I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com