Understanding Accounts on Your Credit Report

Understanding the credit reporting “lingo” is not always easy to understand and the terms and dates involved in reporting can be a little confusing.  While each credit reporting agency has its own style of reporting, every single credit report has one common obligation, to report your information accurately.

When reviewing your report, find the section titled “Creditor Information”, “Credit Items” or “Credit Summary”.  Each of the three major credit reporting agencies, Equifax, Experian and Trans Union all refer to this section of your report differently.  This section, which typically makes up the meat of the report, is a list of all accounts maintained by you whether open or closed within the past seven years.  These are also referred to as “trade lines”.  The accounts in this section may be positive or negative and will remain on your credit file for a good length of time.  Open or active accounts can remain on your file for an unlimited amount of time, while closed accounts can fall of your report within 7 to 10 years.    

Each account you maintain listed on your report will provide a variety of information.  First, under the name of the account, the address and phone number of the creditor will be listed and the account number.  The account number is usually incomplete for security purposes.  Second, the status of the account will be reported.  The status of the account indicates where you are currently on the account, for example if it is paid and current or past due and delinquent.  Usually if you are past due, the creditor will list the number of days, 30, 60, 90 or 120.  After 120 days, most creditors will charge off the account and refer it to a collection agency for payment.  

The next group of information listed on your account is the date opened, date reported and date of status.  If you have any negative information reported on your account, the date of status will be the most relevant date.  As previously indicated, a positive account can remain on your file for an indefinite amount of time, but a negative account will continue to be reported from 7 to 10 years from the date of the delinquency.  The date of status shows when you were delinquent on the account and this date is a bench mark for when the account will be removed from your report.  Past due payments, charge-offs and collection accounts, will be reported for seven years from the date of the delinquency, while tax liens, bankruptcies and judgments will be reported for 10 years.  The 7 to 10 year time frame can be confusing for consumers.  This time begins to run from the date of delinquency or bankruptcy filing and not from the date the account was opened.

Keep in mind that when a creditor marks an account as a charge-off and refers the account to a collection agency for payment, the collection agency can report the same account on your credit file as the original creditor.  The collection agency’s reporting is almost a double hit for you on your report.  The collection agency can report the account as in collections just as the original creditor.  However, as you only have to pay one of the companies, only one can report the balance owed.  Thus, the original creditor will report the account is charged off with a zero balance.  The collector will report the balance. 

But what is most confusing to consumers is that the collector can use a new open date on its account.  A collection agency’s open date does not mean that the account can be reported for seven years from the date it was referred for collection.  The account can still only be reported for seven years from the date the account became delinquent if no payment is made.  The debt collector’s “open date” is merely the date they opened the account in their system and has no bearing on the length the account will remain on the credit report.

For more information on how to understand your report or to speak with a licensed attorney for a completely free case review, contact SmithMarco P.C.