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Can a company report if less then 30 days late?


poblack
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Hi,

Can a creditor report a late payment if it is less then 30 days late. I had a GMAC bill due on the 13th, but since the holiday and all, the payment didn't get processed until the 28th. They sent me a letter on the 22nd stating they may report negative item on my credit report but did not give me a cut off time. I just called and they did in fact receive payment on the 28th (15 days past the due date). They also charged me a late fee.

Thanks for the help.

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No. In order to report a 30 day late on a credit report, it must in fact be 30 days late, not a single day short of that. It is based on calendar days, not business days, so be wary of weekends or holidays that fall on the last day of the 30 day cycle.

Further, federal regulations require that creditors post payments to the account on the day** they receive the payment. They are not allowed to "sit" on a payment in order to charge fees or report derrogatory remarks to a credit report.

In the case of credit cards, the prohibition on posting payments after the day received is codified in the Fair Credit Billing Act. For home and other loans it is codified in the Electronic Funds Transfer Act and other banking regulations.

The main problem is that unless you are sending all your mail by certified, you have no real way of tracking when they actually got it. A bright side, is in that most large financial institutions use what is called a "lock-box" to handle incoming mail. A lock box is a special post-office box located at a 3rd party bank or check clearing house which opens the mail and processes the payments for the lender. Most lock boxes process mailings two or three times a day. If you get your checks back or have a way of checking the endorsement of the payment, you should be able to discern the date which the check was processed and thereby determine when the account should be posted. Wire/ACH payments are even easier since your own bank will have the date and time the money was removed from your account.

**There are two definitions of a "day" in banking regulations and it has to do with hours of operation. If the financial institution has 24 hour check processing or any other round-the-clock consumer service (other than ATMs and automated phone service for accounts), a "day" is defined as starting and ending at midnight. If the institution does not have round the clock consumer services, a day begins when the institution opens its doors for consumer business each morning, usually 9am, and does not end until the following morning.

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wow, great info.

I actually did an ACH electronic debit but they still didn't process the payment til the 28th.

Unfortunately, that's the loophole. The must post when they receive the payment. In the case of ACHs that would be whent he money is transferred. One exception: Home mortgages. If a mortgage payment is arranged for ACH on a specific day, they must post it for that day even if they neglect to run the ACH withdrawl until later. I can't remember the exact name of the law that says this, but it's a recent one passed by Clinton...something like Home Equity Protect Act or something.

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