Question on EE and Negative Payment History

[Anonymous]

I had an installment account that had quite a few 30 days on it, about a week or so ago I called and had Transunion delete it under the Early Exclusion.

I'm confused now when I pull my credit report or credit score on some sites like WalletHub, the first reason showing will be You were deliquent X number of times, but when I look at teh report that tradeline isnt showing.    The number of times is still taking into account the tradeline that was recently deleted.  

Question - does EE just surpress the account but keep it in the shadows?  I'm perplexed how these sites are still couting the number of late payments.  Is there a customer profile that keeps tally and needs updating..

[Anonymous]

As I understand it, and I'm sure someone will correct me if I'm wrong, early exclusion is not a deletion, per se.  It is just that, an exclusion.  The account is still there lurking in the shadows (using the Metro2 file format, I believe) and can still affect your overall score but most scoring algorithms are designed to ignore it (?)  I had the same confusion about utilization on a charge off.  I was getting dinged for a 700 balance on a 500 card that was charged off for the longest time and the number two reason I got each time was "Utilization is too high".

Also please keep in mind that the law states you have to be given *a* reason for your denial, not *the* reason.  So those reasons they give you are all but meaningless.

[RobertEG]

Credit report exclusion is not deletion.

FCRA 605(a) mandates that CRAs exclude adverse items of information from normal credit reports they issue after expiration of certain time periods, usually 7 years.  However, that exclusion is not absolute.  Under the conditions set forth in section 605(b), the most common of which is when you apply for credit in the amount of $150K or more, all of the normal credit report exclusion provisions are exempted, and the creditor can obtain a special credit report that includes any and all derogs of record in your file.

Such "full factual" credit reports are rarely requested by creditors, but are nonetheless provided for under the FCRA.

However, the above would not account for the posted scenario, wherein no accounts show derogs, but the summary or comments reference derogs.  Credit report exclusion under FCRA 605(a) prohibits the CRAs from issuing any credit report that still makes any reference to the adverse item once it has passed its exclusion date.  Thus, it should not appear under the account details, any summary, or any comments.

However, technically, if the derog still has not reached the max required credit report exclusion date and it still referenced in some fashion within a normal credit report, there is no actual violation of the FCRA.  You simply have an inconsistent/incomplete credit report.

If such were to occur, I would order a full report from annualcreditreport.com, which provides direct access to the current CRA file contents of non-excluded information.

[Anonymous]

Appreciate the information.   It sounds like some of the information can still lurk in the shadows, I wonder what kind of impact it has - if any - on the Fico scoring models.    

[Anonymous]

Just a quick follow up, Robert, if I may -- I know that the reason they give you for a denial does not have to be *the* reason you were denied.  Where would that leave a credit grantor who was just the messenger so to speak, if they were to tell an applicant they were denied for too many late payments if those late payments should not have been on the report due  to an EE? 

I apply to Chase, and Chase asks for my report and FICO score, gets back a code that indicates I have had too many missed payments even though those missed payments should not be shown so they just pass that info on to me in the rejection letter.  I would then be entitled to a copy of my report, but it might be 45-60 days later when the reports aren't even the same anymore.  

[RobertEG]

Credit report exclusion prevents a CRA from continuing to show derogs in normal credit reports they issue after the exclusion date has passed.

It does not prevent a given creditor who is aware of derogs from using them in their credit determinations.

They may have knowledge of derogs from either prior credit reports they received before exclusion kicked in, or they may be aware from other sources.  If, for example, the prior derogs were on their own accounts, they would have their own internal records, and would not be relying upon a recent credit report.

The fact that information is no longer present in a current credit report does not remove the ability of a creditor to consider that information.