Experian conducted its eighth annual “State of Credit Report,” which shows that the average credit scores have increased almost to the level of pre-recession numbers. The study also ranked the cities with the highest and lowest credit score averages and sets forth various generational insights.
In this episode we breakdown the report released by Experian!
The Extra Credit Show is a show hosted by Ex-Debt Collection Agency Executive and Consumer Credit Expert Anselmo Moreno and his business partner Richard David. They have been in the consumer credit consulting and credit repair business since 2005. They often found themselves talking to each other about the current state of consumer credit, debt, credit bureaus etc. – take a listen to the minds of two passionate long time credit repair experts.
Available on Itunes, Stitcher, Google Play, and everywhere Podcasts are found.
2017 is here – and it really got me thinking about 2010. Breaking Bad was the top-rated TV series, foreclosures were at an all-time high, and President Obama enacted the Affordable Care Act, aka Obamacare.
What I specifically remember about 2010, was that the theme here in the office revolved around 2003…which meant that we carefully audited credit reports and asked our clients questions about the age of some of their debts specifically to find out if the debt may have gone into default on or before 2003. This would help us determine if the 7-year credit reporting statute would apply to any of the debts present on the credit report.
As you hopefully are guessing by now, we will have 2010 very present in our office this year as we begin to help consumers strategize their credit repair projects and it will revolve a lot around the year 2010.
That year was a tough year for the economy and subsequently for consumers. Jobs were scarce, credit was very tight, home values continued to plummet… remember? It was like the sky fell.
If you had debts go into default and sent to collection sometime in 2010, then 2017 is YOUR year of redemption. Did you have a home foreclosed/short-sold in 2010? That is supposed to be permanently deleted from your credit report this year. The same thing applies to credit card debts, auto loans, medical bills…etc.
Most consumers don’t remember exact dates and are unable to determine with any confidence if their debts are about to age out. Over the last 11 years, we have been able to perfect our craft and can confidently help consumers determine their correct dates and how to plan a credit repair plan with factual dates in mind. It’s super important, because you don’t want to spend money on a debt that goes away next month, nor do you want to wait on a debt thinking it goes away in June when it really goes away in December…for $30 we can audit your credit report and give you factual, clear, concise advice that will help make 2017 generate your best credit score possible. Contact us my calling 661-369-8130 or visiting our website.
I previously wrote in detail about the famous “7-year rule” – missed it? Check it out here: The Seven Year Rule
The “rule” of seven years is perhaps the most prominent credit report factoid known by consumers and the general public. It is actually severely misunderstood by almost everyone that thinks they know it.
A common statement I hear is “after seven years you don’t have to pay it anymore.” This hasty generalization is very misleading. The specific law allows for a creditor to report negative account statuses to the credit bureaus for UP to seven years. (7.5 years to be exact, more on that later.) This law only governs how long the information can remain on your credit report. It has nothing to do with the liability you have on the debt. You will always owe it.
The debt never actually expires, there is no “rule” or “law” that forces a debt to expire after a certain period of time. Most creditors and collection agencies simply give up collection efforts after they lose the ability to credit report an account. This is why consumers can sometimes be shocked when they receive a collection notice for a debt that is often 10, 12, or even 20 years old. Guess what? Technically you still owe that money, the collection agency just ran out of any meaningful tools to collect it. After seven years has passed, nobody will ever see it again on your credit report. It’s like it never happened…
Noww that we have cleared that up, let’s talk about the most important part of this seven year rule.
When does the seven year clock start ticking, and when does it stop ticking? The law clearly says the clock starts 180 days after the original delinquency that led the account to be charged-off or sent to collections. This is known as the “terminal delinquency.” Technically, that means the clock starts six (6) months after your very last payment on the account with the original creditor. Since I see credit reports every single day, I can tell you with certainty that even though the accounts can report for 7.5 years from the last payment you made, credit bureaus today are only reporting for exactly seven (7) years. Not 7.5, even though technically they can. Read the exact text in the FCRA here.
Here is how the seven year rule can apply to items on your credit reports:
Judgments – Seven years from the filing date whether satisfied or not.
Collections – Seven years from date of default with the ORIGINAL creditor, not seven years from when the collection agency buys or is consigned the debt.
Charge Offs – Seven years from the date of the original terminal delinquency.
Settlements – Seven years from the date of the original terminal delinquency
Repossessions and Foreclosures – Seven years from the date of the original terminal delinquency.
Late Payments – Seven years from the date of occurrence.
Can making a payment, or paying a collection reset the seven year statute?
A lot of consumers I speak with are afraid to pay off a collection or even speak to the collection agency because they fear doing so will re-age an old debt and reset the seven years. This is absolutely false, nothing you do can reset the seven years. Paying it won’t, calling them won’t, disputing it won’t. (A partial payment can reset the four year statue for filing a civil suit against you, but that’s a whole different topic we’ll cover in a future blog. )
Just because the FCRA and the law say that’s how long the items can credit report for, doesn’t mean things won’t report for longer. Credit bureaus are handling millions of files and mistakes definitely happen. Collection agencies can also “re-age” the debt (illegally) causing the reporting period to reset. It’s up to you to know your dates and hold the credit bureaus accountable to the reporting statute of limitations, AKA the seven year rule!