Statute of Limitation Collection Account

[Anonymous]

Hello, I joined myFiCO on today and pulled all 3 credit reports. I have a low balance collection account reporting on equifax only. I called the creditor to inquire about the account and to pay it off. The customer service rep stated that they are no longer reporting the debt and that the creditor had submitted the request on February 1st to the credit bureaus to stop reporting. She mentioned that the account would reach statute of limitation for reporting on April 1, 2020

My question is, how long does it take for the collection to fall off of my report once the request from the creditor to stop reporting is received? Will it happen prior to April 1st since it has already been requested? The last time it reported was Jan 29, 2020. Will my equifax credit score improve when this collection falls off? Thanks for your help!

[Remedios]

Hi and welcome

Creditor does not determine when an account is removed. 

That is based on DOFD, and in most instances,  negative stay around 7 years 

Legal limit for reporting is 7.5 years.

If you want to know when, get a copy of free annual credit report. They frequently "show" DOFD, or projected removal date. 

If you defaulted in April of 2013, removal on April of 2020 would make sense

[Anonymous]

Yes that makes sense. Any idea what the customer service person could have been referring to, with regards to the request that was submited? 

[Brian_Earl_Spilner]

Sounds like they're gonna stop reporting it. Question is, why. Did they sell the debt to someone else? If they did, that CA could start reporting it and it would be a fresh hit to your reports and they could continue reporting it until 2020. Kind of odd that they would just stop reporting it because SOL was up. Keeping it on your reports would be the last leverage they have to get you to pay.

[Anonymous]

Thanks for your reply. I called back and asked if the debt had been sold. I was told that it was not sold. The rep said that they generally request the acoount to be completely removed (purged) about 30 days before it reaches statute of limitations. She said I should see it completely fall off by end of month if not sooner. 

Will this make my credit score rise? I am 2 points shy of a 660 on the Fico 5 scoring model. Should I wait for this to fall off before I apply for my mortgage, or will this really not make much of a difference? The balance of the debt is $200. I was planning to pay it this morning before the rep told me that they are no longer reporting on the debt. The last time it reported was on Jan 29, 2020. 

[Anonymous]

Yes, your score should certainly increase.

[Anonymous]

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@Anonymous wrote:

... The rep said that they generally request the acoount to be completely removed (purged) about 30 days before it reaches statute of limitations ... 

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I am confused by the use of "statute of limitations" -- this is typically used in a credit repair situation to name the date the debt is no longer legally binding. It is not used to refer to the date it falls off your credit report.

Statute of Limitation varies by state (i.e., 4 years in TX). The amount of time needed to pass (7 - 7 1/2 years, minus EE success) before "baddies" fall off credit reports does not.

What is the DoFD (date of first delinquency) on this debt? 

[Anonymous]

you are correct, the creditor was referring to the amount of time that they are allowed to legally report on the debt.

[Brian_Earl_Spilner]

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@Anonymous wrote:

you are correct, the creditor was referring to the amount of time that they are allowed to legally report on the debt.

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This is incorrect. What @Remedios said is correct. SOL is how long they have to sue for the debt.

[Remedios]

Reporting period is legally mandated.

Most negative info stays no longer than 7.5 years. 

To find out removal date. You can get a copy of free annual credit report and see the date, or if you have a lot of time to waste, you can call each CRA individually and find out planned removal dates. 

Certain type of BK and some student loans are different 

Statute of limitations is not related to removal of negatives. It refers to period of time creditor has to start litigation 

They can start it even after it expires, but statute of limitations can be used as a defense. 

Those two are not synonymous.