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Late Payments and DOFD Affected by Forbearance/Deferment

New Member

Late Payments and DOFD Affected by Forbearance/Deferment

Has anyone thought about or actually fought to correct their CR to remove "current" on payments during forbearance/deferment? Needless to say, I struggled after graduating and nearly but did not default on my student loans. From what I can tell, I made no payments from April 2012 until June 2013. However, Experian reports this as:

May 2012: Current
Jun 2012: 90 Days Late
Jul 2012: 120 Days Late
Aug 2012: Current
Sep 2012: Current
Oct 2012: Current
Nov 2012: Current
Dec 2012: Current
Jan 2013: Current
Feb 2013: Current
Mar 2013: 90 Days Late
Apr 2013: 120 Days Late
May 2013: 150 Days Late
Jun 2013: 180 Days Late
Jul 2013: Current

If I can get my CR to accurately reflect any of my lates as earlier, the closer I get to my date of first deliquancy and thus can shave months if not almost a year off my wait to drop these lates. Effectively dropping October 2019 with corrections vs September 2020 with no corrections.

In order to minimize this damage, I would need to pursue this about a year from now. I know it's crazy but I want people to poke holes in this idea before I do it. 

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Community Leader
Legendary Contributor

Re: Late Payments and DOFD Affected by Forbearance/Deferment

Depending upon the type of federal student loan, the Higher Education Act exempts the normal credit report exclusion provisions of FCRA 605(a) until the loan is entirely paid.  Thus, while the issue of when the delinquencies may become excluded if they are subject to the normal credit report exclusion provisions of the FCRA, they likely are not.

 

For purposes of discussion, however, montly delinquencies do not have their own specific and separate definition under one of the subsections of FCRA 605(a)(1)-(a)(4), and thus fall under the catch-all provisions of subsection 605(a)(5), which mandates exclusion of "any other adverse item of information" after 7 years from its date of occurence.

 

The CRAs exclude monthly delinquencies based on their own policy interpretation of subsection 605(a)(5), which does not explicitly base exclusion on the date of initial delinquency.   However, the CRAs interpret the adverse item of information to be the date that the account initially became delinquent, and thus exclude all delinquencies in a common chain once the initial delinquency date has reached 7 years.

Your question is thus legit, if the account were not a federal student loan, as the date of initial delinquency would be a single date in early 2012 since all delinquencies would be in a common chain after that initial delinquency date.

 

Thus, determining if/when exclusion would occur if the account was either paid prior to reaching the exclusion period or it was not a federal student loan would require determination of the single, date-certain DOFD.

All subsequent delinquencies would then have a common exclusion date of no later than 7 years after that DOFD.

 

The remaining problem is how the CRA will determine and apply the DOFD.

Unlike collections and charge-offs, which are controlled explicitly based on DOFD (see FCRA 605(a)(4) and 605(c)) and have explicit requirment for the furisher to separtely report the DOFD (see FCRA 623(A)(5)), there is NO requirement that the creditor separately and explicitly report the DOFD to the CRA if their reporting shows only monthly delinquencies.

 

In such cases, the CRA must "guess" at the DOFD using payment history profile.

 

Payment history profile, however, does not provide an objective means of determining the date of initial delinquency.

A crditor may not have reported the first 30-late, which is apparently the case in the posted scenario, where the first late reported is a 90-late.  That infers but does not necessarily require a first late that was two months prior, and additionally, a reportable 30-late is actually at least 30 days after the account actually became delinquent.

 

Thus, there is clearly some subjectivity that must be exercised by the CRA in guesstimating the DOFD from the posted payment history profile.  The assumed DOFD could possibly vary anywhere from Feb to June, 2012.

Unless the creditor chose to report their actual DOFD to the CRA, even though not requrired to do so, the CRA will be guesstimating...... 

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