Creditors who only report positive/negative payments, not balance?

[Anonymous]

Hi there,

With the recent news of PayPal Credit reporting, I am trying to figure out my best course of action.

I was told that they will only report positive payments and negative payments, no balances. I plan on paying off the account in total before the transition in June. For those with experience, what happens if an account that only has payments reported just stays at 0? Does anything get reported?

I really don't want a new account popping up on my report as I'm just making headway. I was told there will be no reporting prior to Synch taking over in June 2019, so if I just pay and close the account before then, that should take care of the situation, right?

Thank you!

[FinStar]

IMO, time will tell whether or not that will be an event.

Most folks here know to take such [CSR] advise with a grain of salt. Of noteworthy, when the BMO Harris Bank Diners Club cards (previously non-reported tradelines), began reporting, the same information like any other tradeline reported, CL, high CL, payment history, balances, etc.

So, there are really no "official" news on PayPal Credit reporting per se other than the interpretation of the most recent communication. To that end, if they end up reporting to align with the rest of the SYNCB suite of credit products, there's no reason for panic.

Even if you were to close it, it would likely report as a closed account. It's not like the account or tradeline didn't exist. It just means that the prior servicer, in this case Comenity and its predecessor, did not report the tradeline activity (at their sole discretion).

[Anonymous]

Hi there,

Thanks for responding! The CSR seemed at least a little knowledgable, and put me on hold a couple times to double check things, so I'm inclined to at least assume his version is a possibility. The reason no CL reporting seemed right to me is the nature of PPC where unlike with a card, the idea is you often hover around your max limit, esp since buying things over the limit is how you get increases. It sounds like that's their compromise vs not reporting at all. But again, I don't know.

I was thinking that if he was correct and reporting starts in in June 2019 with no backlog, they wouldn't report a closed account since there's no payments being made, but I have no experience here. Would it be better to leave it open at zero?

[FinStar]

---

@Anonymous wrote:

Hi there,

Thanks for responding! The CSR seemed at least a little knowledgable, and put me on hold a couple times to double check things, so I'm inclined to at least assume his version is a possibility. The reason no CL reporting seemed right to me is the nature of PPC where unlike with a card, the idea is you often hover around your max limit, esp since buying things over the limit is how you get increases. It sounds like that's their compromise vs not reporting at all. But again, I don't know.

I was thinking that if he was correct and reporting starts in in June 2019 with no backlog, they wouldn't report a closed account since there's no payments being made, but I have no experience here. Would it be better to leave it open at zero?

---

Until additional DPs come to fruition as far as reporting, I'd let this one sleep to be honest.  However, if you are concerned about any utilization shifts or in the event it may report, just keep it with a low balance or PIF if you wish.  Keep in mind that even if it reports with any "unexpected" balance or during a mid-cycle update, it can be easily corrected the following [reporting] month since FICO has no memory.

[RobertEG]

Once a party has established a credit reporting agreement with the CRAs, they are under agreement to comply with the reporting policies of the CRAs, for which the big-4 CRAs have established common policy in their Credit Reporting Resource Guide.

The CRRG clearly establishes mandatory reporting elements, which extend to most of the normal items that we discuss regularly.

Simply reporting payments made is NOT in compliance with their credit reporting agreements with the CRAs.

If payments are made, or for revolving accounts, additional charges are made, the current balance will almost inevitably change.

If the current balance changes, then FCRA 623(A)(2) requires that the furnisher "promptly" update that item of information so as to maintan its current accuracy, and thus updated balance would be a statutory requirment, and not simply a CRA policy issue.

[Anonymous]

---

@RobertEG wrote:

Once a party has established a credit reporting agreement with the CRAs, they are under agreement to comply with the reporting policies of the CRAs, for which the big-4 CRAs have established common policy in their Credit Reporting Resource Guide.

The CRRG clearly establishes mandatory reporting elements, which extend to most of the normal items that we discuss regularly.

Simply reporting payments made is NOT in compliance with their credit reporting agreements with the CRAs.

If payments are made, or for revolving accounts, additional charges are made, the current balance will almost inevitably change.

If the current balance changes, then FCRA 623(A)(2) requires that the furnisher "promptly" update that item of information so as to maintan its current accuracy, and thus updated balance would be a statutory requirment, and not simply a CRA policy issue.

---

That's interesting. A lot of people were speculating that PPC might only report negative activity, that would not be in complance either according to this, right?

Also, I'm wondering if they plan on reporting balance but not CL? I feel like they are trying to find a workaround for the structure of PPC where to get a CLI you pretty much have to be maxed out.

[RobertEG]

Many creditors will not report to the CRAs unless/until derogs have occured.  That is standard practice for many "due in full when billed" businesses, such as telecomm and cable accounts.

However, that is quite different from only reporting limited information, such as only payments.

Once they do decide to report to a CRA, they must then be in compliance with the CRA policies and the accuracy update requirements of the FCRA.

FCRA 611 provides a consumer the ability to dispute any item of information in their credit file that is either inaccurate or incomplete.

Lack of a reported account/debt balance would be both inaccurate and incomplete, and thus can be disputed by the consumer.

If you file a dispute with a CRA, the CRA must then forward a copy to the furnisher, and the furnisher must conduct a reasonable investigation of the accuracy and completeness, and respond back to the CRA by either stating that it is accurate as reported, or correct the reporting so as to overcome the inaccuracy.  That forces the furnisher to make a legal statement as to the accuracy.

If they omit the information, correction would require that they then provide that information, and it must then be accurate to the best of their knowledge.