When Does the FCRA Reporting Clock Start Ticking?

When negative information is reported on your credit file, The Fair Credit Reporting Act (“FCRA”) puts a time limit on how long the information can be reported. It seems fair that negative accounts shouldn’t be a blemish on your credit report forever. Under the FCRA, the Federal law that promotes accuracy, fairness, and privacy of consumer information contained in your credit report, the law defines the time period for which certain information can remain on your credit file and after a certain point, the accounts can no longer be included.

How long can negative information stay on my report?

While positive account information can remain on your credit file for eternity, negative information eventually must fall off your report. After seven years, late payments and most other negative accounts should be removed from your report. Removal of a debt or late payment that has not been paid does not mean you don’t owe the money, it just means the information cannot be reported on your credit file.

Specifically, collection accounts can remain on your credit file for a period of 7 years and 180 days from the date of delinquency. Even after you paid the account, it can still remain as a collection on your report but must be reported as a paid collection. This notation will help improve your credit but the account is still considered negative. Sometimes debtors may request that the collector delete the account in exchange for payment. An agreement to delete the account will obviously improve your score drastically.

Bankruptcies and other public records can remain on your credit file for 7 to 10 years. The reporting of the public record of bankruptcy is for 7 years, but the accounts that were discharged in the bankruptcy can be reported negatively for 10 years from the date of discharge. While the accounts must be reported with a $0 balance which will improve your score, the “Included in Bankruptcy” notation on each account will continue to be reported and impact your score.

When does the clock start?

So, when do these clocks start ticking? If your account was a credit card, store card, or other revolving debt, then the 7 years begins at the time of charge-off. Charge-off does not mean the creditor decided that the debt is not owed. It is merely a designation they take to notify the IRS they consider this a bad debt. That does not mean that they cannot collect it still. Charge off typically occurs when the account hits 180 days late. If it is a medical collection, it is the date of service (assuming, as most doctors state, that all bills are due at the time of service). For bankruptcies, the public record falls off 7 years from the date of discharge, and the accounts themselves are removed 10 years from discharge. Repossessions are 7 years from the date of the repossession. How does one know, from looking at the report when the item is scheduled to come off? Currently, Trans Union makes it nice and easy, and simply states the date that the account is scheduled to be removed. For the others, you have to look at how they are reporting the date of the last payment. That should be reported accurately as when the account was last paid before the charge-off.

If you believe your rights have been violated and you need the advice or assistance of counsel, contact SmithMarco, P.C. for a completely free case review.

Larry Smith

Consumer Rights Attorney at SmithMarco, P.C.
Larry P. Smith is a consumer attorney and the founder and Managing Partner at SmithMarco, P.C. He has tried dozens of consumer rights cases to verdict and has arbitrated over 700 cases. Additionally, he has amicably resolved over 3,000 consumer fraud, Fair Credit Reporting Act and Fair Debt Collection Practices Act cases via settlement. Mr. Smith has been a guest on multiple radio outlets including WLS and WGN in Chicago providing consumer advice. Mr. Smith also provides leadership and delivers lectures to the National Association of Consumer Advocates, The National Consumer Law Center, and the Chicago Bar Association.
Larry Smith

Latest posts by Larry Smith (see all)

Write a Reply or Comment