||Ask Dr. Don
Multiple listings of negative
information on my credit report
Dear Dr. Don,
I hope you can help me. Before I question the credit reporting agency,
I want to make sure what the rules are concerning this.
Can different entities report the same debt more than
once? I have an adverse listing on my credit report for a credit
card by the original debtor. They charged the debt off and sold
it to a collection agency. I settled with that collection agency,
and the debt is settled. However, there are two adverse references
now on my credit report for the same debt. The original bank lists
it and also the collection agency. Is that right?
I never entered an agreement with the collection agency.
My lending agreement was with the original debtor. So why are they
able to enter an adverse remark against me?
I understand that something will be referenced concerning
the credit card debt, but I don't think it should be entered twice.
The collection agency lists the same delinquency information as
the original lender. I need to know what the regulations are concerning
this before I complain to the credit reporting service. I want to
clear this up, not make it worse. Any help you can give me will
be greatly appreciated.
When a creditor charges off a debt and sells the obligation to a
collection agency, the payment history with the creditor remains
on your credit report. If the collection agency is also unsuccessful
in collecting on the debt, then they will report your nonpayment
as well. Showing the payment history for the collection agency continues
the payment history on the debt. Having the creditor charge off
the debt doesn't remove your obligation to repay the debt. They're
just classifying the debt as a nonperforming asset.
That's the bad news. The good news is that seven years
from the first negative listing for the credit card, all negative
entries concerning this payment history will be removed from your
credit history, including the collection agency's account information.
Two exceptions to this seven-year de-listing of negative
information can occur: either when you file for bankruptcy; or the
creditor wins a judgment against you. File for bankruptcy and the
bankruptcy appears on your credit report for seven years with a
Chapter 13 bankruptcy and 10 years with a Chapter 7 bankruptcy petition.
Accounts included in the bankruptcy petition will also be reported
for seven to 10 years from the time of the petition.
If the collection agency sues and wins a judgment
against you for nonpayment of the debt, the judgment stays on your
credit report for seven years from the date the judgment is filed.
Collection agencies that haven't received payment will often threaten
to sue toward the end of the initial seven-year period even though
the debt may not be enforceable based on the applicable statute
of limitations on the debt.
A promise to repay, partial payment or a regular
payment on your part could restart the statute of limitations. Consult
with an attorney before responding to a creditor's threat to sue
-- Posted: Nov. 21, 2002