Some clarification on the 7 year rule please...

[Slow Eddie]

Supposedly trade lines on your credit report will only remain there for 7 years since the date of last activity on the account. Is this a law or just a guideline that the CRA's follow?

For example, my wife had a credit card a few years ago. The last payment she made was in August of 2001 (5 years ago). It has since gone delinquent and into collections. So two years from now (August of 2008) it will have been 7 years since the date of last activity on the account with the OC. Will the CRA's then automatically remove the trade line or will it need to be disputed?

And what about the collection agency that was assigned to that account? If they were given the account in February of 2002, will their trade line also be removed since the account has been dormant 7 years or does their 7 year clock start when they first receive the account?

Thanks,

Eddie

[nascar]

http://www.creditinfocenter.com/legal/FCRA.shtml#605

[Slow Eddie]

http://www.creditinfocenter.com/legal/FCRA.shtml#605

Thanks... I was digging through there at about the same time you posted the link.

4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.

© Running of reporting period.

(1) In general. The 7-year period referred to in paragraphs (4) and (6)(2) of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

I can't decypher either of those unfortunately. Is the second one saying that the 7 year clock starts when the account is either charged off or put into collections? Or does it start after you are 180 days late? Or both???

Maybe I'm confused and its the statute of limitations that begins on the date of your last payment.....

Eddie

[kevin3344]

To add, the 7-year period begins "upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity"

It's a little confusing, but the clock starts running when you go delinquent with the original creditor (OC), not when a collection agency receives the account. The trade line may or may not be removed at the end of the 7 years, so check your CRs carefully.

________

Iolite temp

Edited September 9, 2011 by kevin3344

[Slow Eddie]

To add, the 7-year period begins "upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity"

It's a little confusing, but the clock starts running when you go delinquent with the original creditor (OC), not when a collection agency receives the account. The trade line may or may not be removed at the end of the 7 years, so check your CRs carefully.

Thanks Kevin. So does this mean that the collection agency that bought the account also needs to stop reporting as well?

Eddie

[VonAngel (aka EarthAngel)]

Same question addressed here:

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=257410

Also, do a search for "7-year" or "7 year". There are several other threads that address this question. They can give you additional insight on the 7-year rule.

FYI: the FCRA is for ALL data furnishers, including JDBs, to ensure fair credit reporting.