Credit report exclusion is imposed on the CRAs, not creditors, and requires any adverse item of information reported on an account to be excluded from future credit reports issued by the CRA once they exceed the exclusion period set forth under FCRA 605(a).
FCRA 605(a) provides subsections (1) - (4) that define exclusion periods for specific types of derogs (i.e., BKs, judgments, tax liens, and collections and charge-offs). Monthly delinquencies are not one of the specific adverse items that have their own specific exclusion subsection, to they fall out under the catch-all provisions of subsection (5), which encompasses "any other adverse item of information," and sets a maximum exclusion date of 7 years from the occurence of the adverse item.
As such, the FCRA does not specifically define the date to be used for the begin of the 7 year exclusion period for delinquencies.
While DOFD is specifically applied to exclusion of collections and charge-offs by way of subsection 605(c), that does not specifically apply to monthly delinquencies. Thus, exclusion of monthly delinquencies is not "plain and simple" under the law, but rather is subject to interpretation by the CRAs of the intended meaning of subsection 605(a)(5) as to what date begins the exclusion period, and as to what exactly must be excluded (i.e., each delinquency as it reaches 7 years from its own date of occurence, or all delinquencies at one common date).
The CRAs have, for decades, interpreted the exclusion of monthly delinquencies to require exclusion of all monthly delinquencies in a common chain of delinquency at 7 years from the date of initial delinquency. They view the delinquency to be the date that the account first becomes delinquent, with subsequent reporting of monthly delinquencies referencing the date of first delinquency with the addred statement of how long it has remained delinquent from the initial date (e.g., a 90-late reported in August references a delinquency that occured in May, and is now at least 90 days past that date of initial delinquency).
The final issue of interpretation by the CRAs is whether only the reported monthly delinquencies are excluded, or whether the entire account is excluded based on the account reaching 7 years from the DOFD.
Their policy is to exclude only the monthly delinquency history if the account is currently no longer in a delinquency status when exclusion is evaluated, but to exclude the entire account if it remains delinquent when it reaches the 7 year exclusion date.
Their rationale is the interpretation of section 605(a)(5) that they can no longer include any showing of delinquency after 7 years, and if the account remains delinquent, its current status must be one of delinquency. They cannot simply exclude any reporting of current status, and thus they exclude the entire account if the current status remains one of delinquency.
In the posted scenario, it is assumed that the account was returned to a paid, non-delinquency status after the prior delinquencies, and thus when it reaced 7 years from initial delinquency, there was no need to remove the entire account in order to purge reporting of all reference to reported delinquency. Thus, the CRA and creditor are correct in their refusal to remove the entire account as a part of credit report exclusion. The CRA alone is responsible for removing any delinquencies from the payment history profile, but any deletion of the entire account would be separate, and totally discretionary and voluntary by the creditor.
