Only TransUnion reporting old delinquency, what should my approach be?

[Anonymous]

Just after college, I was an idiot an let my 2 student loans get up to 120 days late.  They became 30 days late in February of 2011, last late payment was June 2011.  I put them into forebearance, made no further payments, had no further deliquencies, then payed off the entire balance on both of them in August 2012.  A few small loans and credit cards since then with an on-time payment history and zero balance at this time.

Both Equifax and Experian have removed the late payments from my credit report and my FICO 8 is 740-750 for both of them.

TransUnion is still reporting 2 student loans with 120-day delinquencies and my FICO 8 with TransUnion is ~650.

Now my wife and I want to buy a home.  Soon.  Do I:

• File a dispute with TransUnion?
  • There's nothing inaccurate in the report, it's just those delinquencies haven't been removed
  • I'm worried about starting a dispute right before a mortgage application
• Apply for a mortgage now and take the hit on the interest rate?
  • Not sure if the bank will use an average or the lowest score, but I know mine will be lower than my wife's
• Wait it out?
  • This won't be a popular choice with my wife; she is understandably upset with me already

Appreciate the help.  Wish I knew about this place years ago.

[Anonymous]

Usually your middle score is used for mortgage lending decisions, so being dirty on one bureau may not be the end of the world.  Upon a MR you'll likely be asked about that account, though.

[iv]

Well, first the good news: a low score with just one CRA isn't a mortgage show-stopper.

The process is:

The "mortgage scores" from all three CRAs are pulled for each of you.

(Those are NOT FICO 8 scores - it's the set that's described as "commonly used in mortgage lending decisions" when you pull a 3B report here: EQ5/TU4/EX2.)

For each of you, the MIDDLE score is used - not an average.  So if you had scores like 580, 740, 750 - they would use the 740.

After the MIDDLE score for each of you is determined, they use the lowest of those two middle scores, (again, not the average).

So whichever of you has the lowest MIDDLE score is what matters.

As for the lates - as you are at or approaching the seven-year mark, they will be disappearing on their own shortly.

While it seems likely that your middle score from EQ or EX will be just fine for the loan, if you wanted to remove the lates now, the keyword to look up is "Early Exclusion" or "EE". Search for that in the forums here, and you should find examples of methods for slightly early removal of those lates.

[Anonymous]

OK, guys, thanks for your thoughts; that's helpful.

I called TransUnion, was pleasant on the phone with them.  Basically they are calculating the DOFD as May instead of February, unlike the other two CRAs, so the TU score will bump up in May.  They won't do an early exclusion for whatever reason and I already tried a Goodwill Letter to Great Lakes without success (FWIW, Great Lakes responded with a letter saying they are prohibited by law [that's not the FCRA] from not reporting old delinquencies, even though others here have reported success).

Sounds like it won't be as big a deal as I thought it would.

[RobertEG]

Did the account first become delinquent in Feb. 2011, and remain continuously delinquent until after June 2011, or was the account brought back into good-standing after Feb. 2011, and then had a new chain of delinquency that remained until June 2011?

Each delinquency in the same chain of delinquencies is excluded no later than 7 years from the date of first delinquency in the chain.

The Feb 2011 delinquency must definately become excluded after Feb 2018.  The determination is then whether the other delinquencies that followed the Feb 2011 date were in the same chain of delinquency, or whether the account was returned to good-standing and a new initial date of delinquency then applies to a later chain.

[Anonymous]

I was all in one contiguous chain starting in February, 2011.  The problem is that it's reported to TransUnion as:

Feb - OK

Mar - OK

Apr - OK

May - 120 days late

June - 120 days late

July - 120 days late

Aug through payoff: OK

So TU says the DOFD is May.  The person on the phone didn't understand that if it's 120 days late in May, then it must be 30 days late in February and that February should be the DOFD.  Said I would have to file a dispute to fix it, which I'm not going to do.  Both Equifax and Experian got it right, even though those CRA's have a similar monthly report (though theirs say 90 days instead of 120).

[RobertEG]

File a dispute.  TU is wrong.

Reporting an account as 120-late as of May means it has been late for at least 120 days, and inherently includes the fact of the initial account delinquency having occured in Fecruary.

When a creditor first reports an account as being 120-late, the CRA reporting manual instructs that they report the date of first delinquency to the CRA, but unlike a charge-off or collection, where reporting of DOFD is required by statute, the reporting of DOFD is not required under the FCRA for monthly account delinquencies, and if not explicitly provided by the creditor, must then be inferred by the CRA.

It is unreasonable and illogical for the CRA to provide a reporting code that the account has been delinquent for 120 days prior, and then use the date of initial account delinquency as the date of the 120-late.  Pure illogic, and defeating the entire purpose of the 120-late delinquency status code.

[Anonymous]

I agree with you, but we're going to meet with a mortgage lender next week.  If I put a dispute on my credit report now, it could cause problems.  I'd be especially screwed if the dispute results in all 3 CRAs re-adding that delinquency for whatever stupid reason.  I don't have all the old records anymore and Great Lakes wasn't exactly very nice to me when I sent them a fairly simple, but gracious and heartfelt, goodwill adjustment request letter.  So I don't trust that they'd side with me on this one.

[RobertEG]

You could, rather than filing a dispute under the FCRA, alternately file a complaint with the CFPB, asserting clear mis-application of the exclusion provision of FCRA 605(a)(5).

Hopefully, the CFPB will send a quick request for response to the CRA.

That might bring the CRA to their senses, or at least cause review by their legal department, who will likely respond with exclusion.