Late Payments...When do they fall off?

[Anonymous]

In August 2001 I was 120 days late on one of my student loans.  The loan was paid off in 2004 through loan consolidation so I know the loan will not fall of for another few years.  But...is the 7-10 year rule valid for a late payment in 2001...does my 120 day late payment fall off the loan profile in 7-10 years.  If anyone can help me I would be very thankful.

[haulingthescoreup]

The late payment should stop updating 7 years from the last time that it shows delinquent on your reports. (It might be from the first missed payment; someone please clarify this for me!)

The account itself should report from 10 years after it was actually closed.

So if everything reports as it should, if you had a late in May 2003, and you closed the account in August 2008, the late should report until May 2010 (7 years), and the account itself should keep reporting until August 2018 (10 years from closing.) HTH

[Anonymous]

I just got off the phone w a supervisor at FICO. She informed me that gov. loans (my sallie mae student loan will never come off of my credit) as in,  not even after 7 yrs.  Before that I was told 7 years after last activity.....so if i had a a late payment in 2000...caught up and just made my last payment today..it would not come off my credit report until 7 years from today. WTF! When I tried to call sallie mae via india I recieved NO help. Anyone to share documented info on this sallie mae situation?

[Logical]

Credit reports from Experian say when negative information is scheduled to drop. It should say something like:

Status Details:  As of xxx 20xx, this account is scheduled to go to a positive status.

They do drop off. If you have several lates over several years you'll see the number of lates drop over time.

[marty56]

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simplybritt wrote:

I just got off the phone w a supervisor at FICO. She informed me that gov. loans (my sallie mae student loan will never come off of my credit) as in,  not even after 7 yrs.  Before that I was told 7 years after last activity.....so if i had a a late payment in 2000...caught up and just made my last payment today..it would not come off my credit report until 7 years from today. WTF! When I tried to call sallie mae via india I recieved NO help. Anyone to share documented info on this sallie mae situation?

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It is possible that the supervsior misunderstood you. Perhaps she was talking about SOL or TLs. 

Negative information like lates are supposed to fall off your report after 7 years from DOFD.  Does the account show that it is current on your CR?.

[Anonymous]

Hauling - Did I hear this correctly?   All baddies stay on for 10 years after closing, but report with NO baddies for 7 years after DOFD?

Is this example correct?

--I went past due on a mtg Feb 07.

--Account closed Aug 07

--Reports the negative for 7 yrs, until Feb 2014

--In Feb 2014, the negative info (and ONLY the negative info) drops off.

--The positive portion of the TL stays on until Aug 2017 (10 years from closed date)

This can't possibly be true, can it?  My understanding was that the entire TL dropped at the 7 years post-DOFD period.

Can you clarify?

Thanks.

[Junejer]

Marty, Boscoe, et al. HTSU is correct about the way that it reports. Baddies will no longer be reported after 7 yrs. and the TL will go away 10 yrs after closing. However, the CSR or supervisor was not mistaken (at least from my point of view). I open my one and only SL in 1989. About one year after graduation, I paid it off (1994). It still remains on my CRs. In fact, it is my oldest account.

[haulingthescoreup]

ByrdMan is right --I missed that this was a student loan (sorry.)

Otherwise, the baddie itself goes away 7 years after it happens; the account remains for 10 years after closing. If you had a baddie in 2005 and closed the account in 2008, the baddie will display until 2012 (7 years after baddie), and the account will remain until 2018 (10 years after closing.)

[RobertEG]

It is not a matter of "should stop dropping," it is a matter of law.  Dropping of derog information from a CR is not at the discretion of the CRA,  any loan officer, or anyone else.  It is mandated by law under the FCRA.  In the case of the lendor still being able to continue to provide neg info after 7 years,  the only justification under the law is exemption (b) below if it was considered a principal credit debt of $150,000+.  Here is the law:

§ 605. Requirements relating to information contained in consumer reports [15 U.S.C. § 1681c]

(a) Information excluded from consumer reports. Except as authorized under subsection (b)

of this section, no consumer reporting agency may make any consumer report containing

any of the following items of information:

(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the

date of entry of the order for relief or the date of adjudication, as the case may be,

antedate the report by more than 10 years.

(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate

the report by more than seven years or until the governing statute of limitations has

expired, whichever is the longer period.

(3) Paid tax liens which, from date of payment, antedate the report by more than seven

years.

(4) Accounts placed for collection or charged to profit and loss which antedate the

report by more than seven years.(1)

(5) Any other adverse item of information, other than records of convictions of crimes

which antedates the report by more than seven years.

(b) Exempted cases. The provisions of subsection (a) of this section are not applicable in the

case of any consumer credit report to be used in connection with

(1) a credit transaction involving, or which may reasonably be expected to involve, a

principal amount of $150,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably be expected

to involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or which may

reasonably be expected to equal $75,000, or more.

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Message Edited by RobertEG on 05-14-2008 07:58 PM