Target Reporting Incorrectly

[the_jan_b]

I hope this is in the right place; if not, mods, please feel free to move it where it belongs...

I am currently helping my fiance fix his credit in preparation for buying a home in a few years.  This past February, he (we) made a payment arrangement with his Target card account that temporarily freezes the use of the card until the terms are completed, or he pays the amount owed; whichever comes first.  According to the terms of the agreement, the monthly payments have to be automatically drafted from his bank account, which he has no problem doing that and the payments have been coming out of his account since the arrangements were made.  We looked at a recent copy of his credit report, and Target is reporting 30-day lates for April and May.

We contacted Target and informed them of this, and they conducted an investigation; we received the results of their investigation, and it states that their reporting of the lates are accurate, which is not true.  We have bank statements that show each payment was drafted from his bank account every month since February; so how could they report a 30-day late for two consecutive months?

Can anyone tell me how to get this fixed?

[K-in-Boston]

Sounds like disputing it with the bureaus won't work since you already contacted Target and they would just send them the same confirmation that the lates are accurate.  I would file a CFPB complaint and attach proof of payment:

https://www.consumerfinance.gov/

[RobertEG]

What was the reason for entering into the payment agreement and freeze of use of the card?

Was the account delinquent, with the agreement being a way to return the account to good-standing without further action on their part, such as suing or referral for collections?

If the agreement resulted from account delinquency, was there a written term that specified they would not report delinquencies to the CRAs provided the payments were all timely?

[the_jan_b]

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@K-in-Boston wrote:

Sounds like disputing it with the bureaus won't work since you already contacted Target and they would just send them the same confirmation that the lates are accurate.  I would file a CFPB complaint and attach proof of payment:

https://www.consumerfinance.gov/

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Thanks, K! I figured it would come to that; would it be best to do it by mail or online?

[the_jan_b]

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@RobertEG wrote:

What was the reason for entering into the payment agreement and freeze of use of the card?

Was the account delinquent, with the agreement being a way to return the account to good-standing without further action on their part, such as suing or referral for collections?

If the agreement resulted from account delinquency, was there a written term that specified they would not report delinquencies to the CRAs provided the payments were all timely?

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Yes, the account was delinquent (about 33 days) and he (we) wanted to keep the account open because we like shopping there; and as part of the agreement, the card had to be restricted until the terms of the agreement were completed. At the time we made the agreement, it was close to the due date of the February statement, so we scheduled an automatic payment to be taken out a couple of days before it was due.

There wasn't anything in the agreement stating whether any negative information would be reported, nor was anything stated that they would turn the account over to collections. As a matter of fact, basically the agreement was that the card would be restricted until the terms of the agreement were fulfilled. Once the terms of the agreement were fulfilled, or if the amount under the agreement was paid before the end of the term period, the restriction would be lifted.

[RobertEG]

If the account was delinquent, the current status would still be delinquent until the entire deficiency was repaid.

Thus, the correct currrent status would be delinquent, and prior monthly delinquencies would be reportable to the payment history profile.

If the payment agreement did not specifically state that they agreed not to report delinquencies to the CRAs as long as you continued to make the agreed payments, then the reporting of delinquencies is proper.

You could contact the creditor and request a mod to the agreement that includes the provision that they remove and not report delinquencies provided you continue to meet the agreed payments.

[iv]

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@the_jan_b wrote:
Yes, the account was delinquent (about 33 days) and he (we) wanted to keep the account open because we like shopping there; and as part of the agreement, the card had to be restricted until the terms of the agreement were completed. At the time we made the agreement, it was close to the due date of the February statement, so we scheduled an automatic payment to be taken out a couple of days before it was due.

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If you are past 30 days late, and then make just a single month's minimum payment (or less, if this agreement allowed that), you are still 30 days late...

So, for instance, if you didn't make a payment that was due Jan 1st, and then on Feb 3rd made a single minimum payment - that payment is applied to the Jan 1st amount due, and the clock is still running on what will become a late payment for Feb... and then a minimum payment in March will count as a 30 day late payment for Feb, etc, etc.

Basically, if you "skip" a monthly payment, but then start making minimum payments the following month, you are continuously 30 days late - until you make a payment of at least 2x the minimum (plus fees/late charges), to bring your account current.  This is NOT the same as going 60, 90, 120, days late, but it does keep you in a running 30 day late state.

Unless your agreement spelled out something different... they would be within their rights to keep reporting 30 day lates every month until you caught up or paid it off. It sounds like they didn't do that, and only reported for those two months, possibly due to your agreement continuing to be paid as negotiated.

[AndySoCal]

If the account was past due when the payments were and each payment did not bring the account current IE pay the past due amount off then the reporting is correct.

[the_jan_b]

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@RobertEG wrote:

If the account was delinquent, the current status would still be delinquent until the entire deficiency was repaid.

Thus, the correct currrent status would be delinquent, and prior monthly delinquencies would be reportable to the payment history profile.

If the payment agreement did not specifically state that they agreed not to report delinquencies to the CRAs as long as you continued to make the agreed payments, then the reporting of delinquencies is proper.

You could contact the creditor and request a mod to the agreement that includes the provision that they remove and not report delinquencies provided you continue to meet the agreed payments.

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Would the reporting for April and May still be correct, even if his credit report shows that the account was current for January and February?  I'm just trying to get this figured out, and I guess it's not sinking in...maybe I'm over-thinking the situation (which has been known to happen from time to time...   ).