02-27-2013 11:07 PM
So here is something that I have been thinking about .. I have an auto loan - which I will be making my very last payment on next month! For the last 2 years, I have not missed a payment or been late at all. However, in 2011 I was 30 days late 2 times after getting into a car accident and had a hard time with bills until the insurance money came. As of right now, it's still listed as a negative factor due to the late payments. I realize that they most likely don't affect my score all too much, but will this account ever be listed as positive or will it stay negative until the 7 years are up and then just disappear? I would like it to stay on my history - if it will eventually report as a positive. I have written up GW letters and am ready to send them like crazy but if that doesn't work, did I just lose all the rest of my good payment history? I'm hoping since I ended the loan on a good note, the lates will eventually fall off and it will start to report as a good account.
I hope that makes sense!
02-27-2013 11:43 PM
AFAIK, each late will fall off seven years after each respective occurrence. The account itself should remain on the report for ten years after the last payment is made. After the lates fall off, the account will still be noted as having been past due at some point for as long as it is on your reports. Someone with more experience on the issue may want to chime in here.
02-28-2013 01:08 AM - edited 02-28-2013 01:10 AM
FCRA 605(a)(4) precludes any reference to a delinquency after 7 years from its date of occurence. So no reference can be made to it in your CR once it becomes excluded.
Retention of prior status of an account works like this. Once an account that was delinquent is brought back into good standing, its current status no longer reflects any prior delinquency status, period. The prior level of delinquency is retained in a separate code called your Payment Rating. However, the exclusion of that retained, past historical code is also covered by sectionn605(a)(4), so upon exclusion of the delinquency, that code must also delete the prior status.
You account will thereafter appear, for credit reporting purposes, the same as if no delinquency had ever occured.
Deletion of the account itself, and thus loss ot its age in your lenght of credit history calculation, is an entirely arbirtrary administrative policy of the CRAs, and is not regulated under the FCRA. For puroses of clearing their database of millions of items of information that they no longer consider relevant to their task, they choose to arbitrarily delete old accounts once they reach approx 10 years after account closure. The apparent thinking on their part is that accounts that have been closed for approx 10 years must have had all prior adverse items reported under the account past their CR exclusion dates, and thus of no real use to their clients. They ignore the obvious derogatory scoring effect on consumers, who lose old accounts in scoring of their length of credit history. That apparently is not of concern to them.
As for your account now being "negative" due to those old, minor derogs, it is only "negative" in general name. Scoring impact is now minimum, and the only negative effect would be their appearance in a manual review. I doubt any creditor will raise an eyebrow over an old, minor, 30-late.