The Fair Credit Reporting Act (FCRA) Compliance Date determines how long some negative credit items such as charge-offs, late payments or collection accounts can remain on consumer credit reports.
Typically a negative credit item, such as a charge-off can remain on your credit report for 7 years from the date of first delinquency.
The date of first delinquency also known as the “DOFD” is the date an account became 30 days late which led to a charge-off by the creditor. The FCRA’s Compliance/Obsolescence date determines when the 7-year reporting period begins for accounts that have been charged off or placed for collection.
A creditor must notify the credit reporting agencies within 90 days of reporting a charged-off account of the MONTH and YEAR of the COMMENCEMENT of the delinquent account which immediately preceded the account being charged-off.
Here is what Section 623(a)(5) of FCRA says:
“In general. A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the date of delinquency on the account, which shall be the month and year of the commencement of the delinquency on the account that immediately preceded the action…”
The commencement date is very important as it determines when the clock starts to tick on the statute of limitations on negative credit reporting on consumer credit files. The most important fact for consumers to remember is that this date cannot be changed and is only established by the original creditor who charged-off the account.
This means a charge-off account that is transferred to a collection agency or purchased by a collection agency does not change the FCRA Compliance date. Therefore, if a charge-off is due to drop off a consumer credit report and a collection agency purchases that account, after the compliance date has passed, that collection agency can no longer report that account even if they recently purchased the debt.
The collection agency can continue to pursue you for the debt, however, they cannot report the debt on your credit report. If the collection agency changes the FCRA Compliance date, they have illegally re-aged the account and committed a serious violation.
There are other dates associated with collection accounts that can change. For instance, if you make a payment on a collection account, the “date reported” would change to the then current month/year. The date of last activity can be updated but those dates are not used as the FCRA Compliance Date that determines when the account will be deleted.
Here is what Section 605(c)(1) of FCRA says:
“(1) In general. The 7-year period referred to in paragraphs (4) and (6) 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.”
In simpler terms a creditor can charge-off an account 180 days after the first date you missed a payment. The date you became delinquent begins the “Aging” process and once the debt has matured 7.5 years, it must be DELETED from your credit report.
The FCRA Compliance/Obsolesces Date is not always clear on consumer credit reports. It is not the date of last activity or the date reported. You may have to contact the credit reporting agencies to find out when a negative item is due to be removed from your credit reports.
To request the FRCA Compliance Date you will have to write to each credit bureau to request it. Ideally all the credit bureaus would contain the same date but in some instances the FCRA Compliance Date may vary by a few months. The FCRA Compliance date will tell you the date the account first became past due and no other payments were made.
The date of the initial missed payment, called the original delinquency date, determines how long an account with a negative payment history will remain on the report. The original delinquency date is the date the account first became delinquent and was never again brought current. Accounts with late payments should be removed seven years from this date.
If an account has been sent to a collection agency, they may report the collection account as a separate item on your credit reports. The collection account should have the same original delinquency date as the original account, and will therefore be removed on the same date.
Here is a simple sample letter to get the FCRA Compliance Date:
Example: I am inquiring about [account name] and [account number]. Please provide my consumer disclosure file under FCRA Section 609(a)(1) and provide me with the date of first delinquency, the FCRA compliance date and the name of the party who reported the date of first delinquency.
[Note: Be sure to accompany your letter with the required processing which is currently $11.50 and at least 2 forms of identification].
If you believe a creditor or collection agency has re-aged a negative credit item read further about re-aging and then take action. You may have a winning lawsuit on your hands if they refuse to correct the matter or if your creditworthiness has been harmed.