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Good evening everyone,
I'am new to this boards and currently on a long journey in repairing my credit from years of reckless credit use. There is alot of useful information on this boards that has helped me get in the right track. That being said, I keep reading accounts of successful PFD stories and or GW letters working in the borrower's favor. I was under the impression that banks and collection agencies are required to report deragotary information as long as it doesn't pass the 7.5 year window period in which such information can be allowed to be reported.
Doesn't PFD and GW letters defeat the purpose of providing future lenders an accurate depiction of a borrowers credit profile? I have charged off accounts and collection accounts that are definately mine and I don't know If I would be breaking the law if I took the PFD and GW route in cleaning them up. Is there a loophole to all of this??
Thank you.
No, there is no legal prohibition against a furnisher deleting prior derogs.
The legal requirement under FCRA 623(a)(1) is that what is reported cannot knowingly be inaccurate.
Credit reporting is voluntary, and removal of voluntary reporting is not a violation of the statute.
HOwever, you are correct that removal of prior derogs does deprive others of a full payment history profile for a consumer.
For that reason, the CRAs to have an internal policy that instructs furnishers not to delete based on payment of the debt.
The CRAs sell credit reports, and their value is based on part on their completeness, so they dont want subjective removal of useful, and thus valuable, information.
Neither a furnisher nor you are "breaking the law" by pursuing or making GW or PFD deletions.
However, a furnisher could possibly be placing their credit reporting agreement with the CRAs in peril by non-compliance with its terms.
I know of no specific example of a CRA terminating a credit reporting agreement based on grant of deletions based on payment of the debt, so it appears to be a provision that is not actively enforced.