How Does a Creditor Determine the Date of the First Delinquency for a Drop Off?

Federal law dictates when negative information drops off U.S. consumers' credit files. Creditors and debt collectors must abide by the law and report accurate information about when an account first became delinquent. Inaccurate reports about delinquent payments can cause negative information to remain in your credit files longer than it should.

Federal Law

The U.S. Fair Credit Reporting Act requires creditors to report the date that a customer first fell behind on payments as the first date of delinquency. That date stands independent of other actions, such as turning an account over to a collection agency. Information about past-due credit card accounts usually remains in consumer credit files for seven years from the first date of delinquency. The problem is that the date of last activity appears on credit reports instead of the first delinquency date. The two dates can cause confusion as consumers try to determine whether negative information in their credit files is more than seven years old.

Account Activity

The date of last activity shown on credit reports refers to several types of actions, including the last payment or last charge on a credit card. Nonetheless, the date of last activity has no affect on how long negative information remains in your credit file. Therefore, you need to contact your creditor or a collection company handling your account to verity the first delinquency date if you don't have information that specifies the date.

Re-aging

Debt collectors are required to report the original date of delinquency for credit card accounts, just like creditors. However, the Neighborhood Economic Development Advocacy Project indicates that some collectors may attempt to skirt the law by re-aging delinquency dates. For example, some collectors report the date a creditor turned over an account to them as the first delinquency date. Such actions keep negative account information on credit reports longer in violation of the Fair Credit Reporting Act.

Considerations

You have the right to dispute inaccurate information you find on your credit report, including inaccurate delinquency dates. Equifax, Experian and TransUnion are the major credit-reporting companies. They're required to investigate disputes consumers submit concerning the information in their credit files. You can bolster your dispute over an inaccurate delinquency date by sending a copy of an old credit card bill or other notice that shows the first date of delinquency. The companies must delete negative credit account information from files if their investigations reveal that it's more than seven years old.