topic Re: DOLA vs DOFD and Reporting in Rebuilding Your Credit

DOLA vs DOFD and Reporting

Anonymous — Wed, 27 Mar 2019 12:46:45 GMT

I am starting to rebuild and reading and learging a lot ! I belong to a few other groups and see information that is sometimes different than what I see here so am I looking to clarify. My understanding of how this works - drop off date is 7.5 tears from DOFD - and I know how we got that - 7.5 years from the first 30 day that was never brought current that ultimately led to the charge off/collection. Now my question - I see time and time again follks stating making a payment resets the DOLA thus giving a negative account new life and it will now report another 7.5 years. I feel they are confusing reporting and statute of limitations but everyone is disagreeing and stating I have it all wrong. HELP.

Re: DOLA vs DOFD and Reporting

thornback — Wed, 27 Mar 2019 14:52:10 GMT

Hi Sattnan, welcome to the forums!

@Anonymous wrote:
I am starting to rebuild and reading and learging a lot ! I belong to a few other groups and see information that is sometimes different than what I see here so am I looking to clarify. My understanding of how this works - drop off date is 7.5 tears from DOFD - and I know how we got that - 7.5 years from the first 30 day that was never brought current that ultimately led to the charge off/collection. Now my question - I see time and time again follks stating making a payment resets the DOLA thus giving a negative account new life and it will now report another 7.5 years. I feel they are confusing reporting and statute of limitations but everyone is disagreeing and stating I have it all wrong. HELP.

Updating the Date of Last Activity (DOLA) will not reset the 7.5 year reporting statute -- that is always based on the DOFD. When you make a payment on an account that has been dormant for a while, this will update the DOLA as well as the payment history of the account, and this can drop your scores when the updated information is negative. For example, take a charge-off account that had not been paid or updated by the creditor since 2016. It has been aging in an idle state for 3 years now, so FICO scores have begun to recover and rise, despite the outstanding balance. All of a sudden, a partial payment is made on the account and the creditor must now update with the new info. This will update the balance and the DOLA, as well as the payment history. The months between 2016 and the date of payment will be updated to reflect a continued charge-off status - that partial payment still does not bring the account current, so the original DOFD still stands but the updating of that payment on your credit reports will change the DOLA. The udpate of this negative information makes the charge-off look 'fresh' again in the eyes of FICO which will usually cause a drop in scores.

The same can happen even if no payment is made to the dormant account -- the creditor can choose to update information at any time, so they may update the payment history to reflect a charge-off status for all prior months that the account had not been updated - causing a drop in scores. This also sometimes occurs when an account is disputed for some reason -- any updates to the account will affect the DOLA.

So the 7.5 year reporting statute begins at DOFD. The DOLA, if updated periodically, can revive an account and have a negative effect on FICO scores, but will not change the DOFD.

Re: DOLA vs DOFD and Reporting

vntrsc — Wed, 27 Mar 2019 14:08:09 GMT

From the Fair Credit Reporting Act.

15 U.S. Code § 1681c(a)(4)

(a) Information excluded from consumer reportsExcept as authorized under subsection (b), no consumer reporting agency may make any consumer report containing any of the following items of information:

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

15 U.S. Code § 1681c(c)(1)

(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.

Re: DOLA vs DOFD and Reporting

Anonymous — Wed, 27 Mar 2019 14:12:37 GMT

Just for clarification, I have an auto loan that was paid off in November of 2015, I had a 30 day late payment in August of 2012 and a 90 late payment in January of 2015. Since the DoFD was August of 2012 so does that mean the entire tradeline will fall off of my CR's in January 2010?

Thanks in advance!

Re: DOLA vs DOFD and Reporting

vntrsc — Wed, 27 Mar 2019 15:16:18 GMT

@Anonymous wrote:
Just for clarification, I have an auto loan that was paid off in November of 2015, I had a 30 day late payment in August of 2012 and a 90 late payment in January of 2015. Since the DoFD was August of 2012 so does that mean the entire tradeline will fall off of my CR's in January 2010?

Thanks in advance!

If the DOFD being reported by the creditor is August, 2012, the TL should fall off around January, 2020.

Re: DOLA vs DOFD and Reporting

Anonymous — Wed, 27 Mar 2019 14:35:09 GMT

Thank you so much for your response. It makes total sense. It kills me to see this inaccurate information in other groups (and believe me, I don't know a lot but have done some research) and to see others argue that it makes the debt reportable for another 7.5 years. So much to learn here and a big thank you to all of you seasoned experts for helping us along the way !

Re: DOLA vs DOFD and Reporting

Anonymous — Wed, 27 Mar 2019 14:38:03 GMT

Thank you for providing this information ! I was hoping to be able to find quickly where this was cited. You contributors are the absolute best !

Re: DOLA vs DOFD and Reporting

vntrsc — Wed, 27 Mar 2019 14:40:25 GMT

@Anonymous wrote:
Thank you so much for your response. It makes total sense. It kills me to see this inaccurate information in other groups (and believe me, I don't know a lot but have done some research) and to see others argue that it makes the debt reportable for another 7.5 years. So much to learn here and a big thank you to all of you seasoned experts for helping us along the way !

Just ask those other groups to point out the specific section of the FCRA that states the 7-year reporting period is based upon a date of last activity.

Re: DOLA vs DOFD and Reporting

Anonymous — Wed, 27 Mar 2019 15:03:57 GMT

@vntrsc wrote:
@Anonymous wrote:
Just for clarification, I have an auto loan that was paid off in November of 2015, I had a 30 day late payment in August of 2012 and a 90 late payment in January of 2015. Since the DoFD was August of 2012 so does that mean the entire tradeline will fall off of my CR's in January 2010?

Thanks in advance!

If the DOFD being reported by the creditor is August, 2012, the TL should fall off around January, 2010.

Thank you, that's indeed great news!

Re: DOLA vs DOFD and Reporting

vntrsc — Wed, 27 Mar 2019 15:17:11 GMT

@Anonymous wrote:

@vntrsc wrote:
@Anonymous wrote:
Just for clarification, I have an auto loan that was paid off in November of 2015, I had a 30 day late payment in August of 2012 and a 90 late payment in January of 2015. Since the DoFD was August of 2012 so does that mean the entire tradeline will fall off of my CR's in January 2010?

Thanks in advance!

If the DOFD being reported by the creditor is August, 2012, the TL should fall off around January, 2010.
Thank you, that's indeed great news!

I meant to say January, 2020.

Re: DOLA vs DOFD and Reporting

RobertEG — Wed, 27 Mar 2019 15:53:15 GMT

No, an entire account is not excluded based on exclusion of monthly delinquencies.

Monthly delinquencies are excluded under the provisions of FCRA 605(a)(5), which stipulates that the adverse item (i.e., the monthly delinquency) has an exclusion date of 7 years. It does not mandate exclusion of the entire account.

If an account had a reported 30-late in Aug 2012 and a subsequent 90-late in Jan 2015, and if the account remained delinquent between those dates, then the exclusion of monthly delinquencies would be based on the initial date of delinquency, which would be July 2012, and all delinquencies in that common chain would become excluded after 7 years from July 2012, which would be as of Aug 2019.

However, it is not likely that an account with a 30-late in Aug 2012 and a 90-late in Jan 2015 was continually delinquent between those dates. More likely, the account was paid back into good standing sometime after Aug 2012, and a new initial delinquency then occured sometime in mid to late 2014.

In that event, each chain of delinquencies would have their own individual exclusion date, with the first being in approx Aug 2019, and the second likely being in mid to late 2021.

Only the reported delinquencies would be excluded, and not the entire account.

Re: DOLA vs DOFD and Reporting

Anonymous — Wed, 27 Mar 2019 16:23:05 GMT

@RobertEG wrote:
No, an entire account is not excluded based on exclusion of monthly delinquencies.
Monthly delinquencies are excluded under the provisions of FCRA 605(a)(5), which stipulates that the adverse item (i.e., the monthly delinquency) has an exclusion date of 7 years. It does not mandate exclusion of the entire account.

If an account had a reported 30-late in Aug 2012 and a subsequent 90-late in Jan 2015, and if the account remained delinquent between those dates, then the exclusion of monthly delinquencies would be based on the initial date of delinquency, which would be July 2012, and all delinquencies in that common chain would become excluded after 7 years from July 2012, which would be as of Aug 2019.

However, it is not likely that an account with a 30-late in Aug 2012 and a 90-late in Jan 2015 was continually delinquent between those dates. More likely, the account was paid back into good standing sometime after Aug 2012, and a new initial delinquency then occured sometime in mid to late 2014.
In that event, each chain of delinquencies would have their own individual exclusion date, with the first being in approx Aug 2019, and the second likely being in mid to late 2021.

Only the reported delinquencies would be excluded, and not the entire account.

Thank you!