Dispute Credit Reports

Before I get to the specifics of your question, I need to correct some subtle misconceptions you expressed in your question.

First, the date of first delinquency is key, and not the date of last payment. Federal law (US Code Title 15, §1681c) controls the behavior of credit reporting agencies. Under Federal Credit Reporting Act (FCRA) §605 (a) and (b), an account in collection will appear on a consumer's credit report for 7½ 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 7½ 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.

Second, you mentioned your state's statute of limitations on contract loans. State statutes of limitation and the FCRA's seven-year rule are separate and independent of each other. Whether a state has a four-, six-, or ten-year statute of limitations on credit card debt is irrelevant to a consumer's credit report. When resolving incorrect information on a credit report, or when answering questions about the seven-year rule, ignore your state's statute of limitations.

Third, a consumer has the right to dispute inaccurate information that appears on a credit report. A consumer can do it themselves or hire a service provider to do the work for them.

Recommendation

If your estimate that your Bank of America credit card default will roll-off your credit report in October is accurate, then consider leaving that account alone. It is likely Bank of America sold that collection account years ago, and the rights to collect that account are owned by a collection agent. The dirty secret among unscrupulous collection agents is some will deliberately misreport a date of first delinquency to the credit reporting agencies in an effort to apply pressure on the consumer in negotiating the debt. This is illegal under the FCRA and exposes the unscrupulous collection agent to civil liability under the FCRA, but the threat of a lawsuit does not deter some people.

My point in raising this specter is found in the cliche, "Let sleeping dogs lie." Right now, your old Bank of America collection account is about to roll-off your credit report. If you dispute today, the credit reporting agencies will be required to contact the owner of the collection account to inquire as to the date of first delinquency, the balance due, and so on. If the collection agent who owns this collection account attended the Bernard Madoff School of Ethics, he or she may be tempted to report an inaccurate date of first delinquency and initiate collection efforts. Therefore, your smartest course of action is to do nothing with this account today.

Regarding your sentence, "Same account has 15 collection accounts open with dates not scheduled to be removed as far out as 2014..." I am assuming you are referring to a separate Bank of America (or other credit card issuer) account. Here, the risk/reward calculation is different for both you and an unscrupulous collection agent. An unscrupulous collection agent has zero incentive to risk a lawsuit by altering a date on a collection account that has four years remaining on the consumer's credit report. You the consumer have a big incentive to dispute the debt. If the owner(s) of these 15 collection accounts fail to respond to a dispute, then under the FCRA the credit reporting agencies must remove them from your credit report.

You have little to lose by disputing the 15 accounts. There is a small risk that by disputing a collection account you signal to the account's owner that you are indicating a desire to clean up your credit report, and the collection agent may seize on this as an opportunity to initiate collections. However, this risk is small, in my opinion.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com