BILL'S ANSWER
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.
In the debt collection business, it is common practice for lenders to sell accounts to third party debt purchasing firms who then take over the collection of the debts. Frequently, accounts are sold with out-of-date and incorrect information, and without all of the pertinent documentation, which leads to purchasers reporting inaccurate information to the credit bureaus, as may have happened in your case.
Contact the original lender who repossessed the vehicle to inquire if it sold your delinquent account to a third party collector. If the lender confirms that it did sell the account, you should request that the lender contact the purchaser to correct the account balance the new creditor is reporting to the credit reporting agencies. If the original lender states that it has not sold the account, you should ask them about this second listing on your credit reports to see if they can provide any insight as to why the account is now appearing twice, once with incorrect information. Once you have spoken with the original creditor, you may want to contact the creditor which is reporting the account incorrectly on your credit reports to determine who they are and how they are connected with this debt.
Inform the creditor that the balance and delinquency date they are reporting are incorrect, and ask what procedures they have in place to correct such errors. Hopefully, the creditor will be willing to correct this erroneous information voluntarily, saving you the trouble of disputing the account with each of the credit bureaus directly. For more information about credit, credit reporting, and credit scoring, I invite you to visit the Bills.com credit help page.
If you find that this new creditor is unwilling to correct the inaccurate information voluntarily, your next step would be to dispute this derogatory listings with the three major U.S. credit reporting agencies -- Equifax, Experian, and TransUnion. The first step in the process of disputing any credit item is to obtain a copy of your credit file from each of the agencies to determine which agencies are reflecting this inaccurate information; you can request a free copy of your credit report from each company by visiting AnnualCreditReport.com. Disputing a listing on your credit profile is as simple as writing a letter to the credit bureau in question explaining why the item is inaccurate and why it should be removed from your credit report; you should also include any documentation which corroborates your claim, such as a statement from the original creditor showing the correct account balance after the repossession sale.
See the Federal Trade Commission document FTC Facts for Consumers: How to Dispute Credit Report Errors for more information.
The company listing the account has 30 days to challenge your dispute; if they do not challenge the dispute within that timeframe, the account should be removed from your credit report.
One point I should clarify is that, if a creditor has filed a lawsuit and obtained a judgment against you for the balance of a debt, the account can appear on your credit report twice, once in the “derogatory items” category, and once in the “public records” listing. I do not think that is what happened in your case, since an account and a corresponding judgment should have roughly the same balance and list the same creditor as owning the account. However, before disputing this account with the credit bureaus, you may want to double check to make sure that the item about which you are concerned is not a public record stemming from the original debt.
I wish you the best of luck in resolving this credit reporting error, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/
October 14, 2009
October 13, 2009
September 08, 2009
September 08, 2009
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