Statute of Limitations

[xangoboy]

I don't know if this is the right forum for this question. If not, I apologize.

I had a discussion with someone today that told me a states SOL directly ties in to it's reporting at the credit bureaus.

So for example. If you live in a state where the SOL on collecting debts is 5 years, then after 5 years it shouldn't be reporting to the bureaus. Does that sound accurate? I don't recall ever reading anything like that? I always thought for the usual stuff it's 7.5 years, and for others it's 10 years.

[Anonymous]

I heard the same thing.  Not sure what states this pertains to.  Not in my state of FL.

[RobertEG]

Those rumors most likely originate with some who inaccurately confuse credit report exclusion to be a statute of limitations.

They are different concetpts governed by different statues.

No states have statutes that prevent reporting to a CRA that is based on the statute of limitations on initiating legal action.  No state statutes require the CRAs to exclude information from credit reports they issue after expiration of the SOL on initiating legal acion.

Apples and oranges.

First and foremost, the credit report exclusion periods are not prohibitions against anyone reporting information to a CRA.

They are restrictions on what a CRA can continue to include in credit reports after the credtt report exclusion dates have passed.

A debt collector, for example, is not prohibiited from reporting their collection after any period of time.  They are requried to obtain and report the DOFD, and it then becomes the responsibility of the CRA to monitor that date and to normally ensure that the collection is not included in credit reports they issue after expiration of the exclusion date.

 There is thus not even a statute of limitations on credit reporting, let alone one that is also tied to a statute of limitations on initiating civil action to obtain a judgment.

The CRA still retains the data, and can even receive new reporting, as the credit report exclusion dates are not absolute.  The are all exempted under the specific conditions set forth in FCRA 605(b), such as a request for a credit report in connection with a request for credit in the amount of $150K or more.

In such cases, any reported information, irrespective of when reported, can be included.

[Anonymous]

New York state has a regulation regarding early deletion of charge offs that been paid in full 5 years after DOFD. Not sure the exact specifics, but that may be what your friend is referring to.

SOL and credit reporting have no direct relation to each other. Some states, such as Rhode Island, have SOLs longer than 7 years while some, such as Delaware, have SOLs short as 3 years; 4-6 years is typical in many jurisdictions. Also, DOFD often doesn't matchup with the the start of SOL, though often they're within months or less of each other. But not a sure thing depending on jurisdiction and events, if any, which have occurred since the delinquency, such as acknowledging the debt / negotiating a payment plan, etc.

Furthermore, public records (tax liens, judgements, etc) often never show up on credit reports, since they don't directly report; relying on 3rd party vendors that miss a lot of things. And even when public records do appear correctly, they often fall off reports well before SOL expires, which could be decades in the future.

In short, credit reports / DOFD / TL fall offs have no direct relation to SOL.